US consumer spending rises 6.1% through August, defying gloomy sentiment

October 5, 2026 at 06:00 AM2 min

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US household spending rose 6.1% in the 12 months through August, up from 4.3% annual growth at the end of last year, the Commerce Department reported. The increase was driven by broad-based consumption across food, travel, and goods, even as consumer sentiment remains near historic lows.

Key Facts

US household spending rose 6.1% in the 12 months through August, up from 4.3% annual growth at the end of last year.
Inflation-adjusted spending climbed 2.6% over the same period, extending a five-year streak of steady growth.
Consumer prices rose about 3.4% in the year through August, accounting for just over half of the nominal spending increase.
The unemployment rate remains historically low even as hiring slowed last month.
Chicago Fed President Austan Goolsbee attributed the growth to a broad-based, stable labor market.

Consumer Spending Trends

Americans increased spending on food, travel, couches, and Halloween decor, pushing through inflation and gloomy economic feelings. The dollar amount spent by US households rose 6.1% in the 12 months through August, up from 4.3% annual growth at the end of last year. Just over half of the spending increase owed to persistent inflation, with consumer prices up about 3.4% over that period. Inflation-adjusted spending climbed 2.6%, extending a streak of steady growth over the past five years.

Labor Market and Wealth Effects

The job market has cooled from the postpandemic surge but remains sturdy, with unemployment hovering at historically low rates. Many older Americans who own homes and stocks have benefited from soaring prices for both, making them comfortable spending more. Chicago Fed President Austan Goolsbee said the main engine of GDP growth has been broad-based consumer spending tied to a stable labor market. Hiring slowed last month, though the unemployment rate remains low.

Sentiment-Spending Divergence

Upbeat spending contradicts downbeat consumer sentiment, with long-running gauges of consumer moods near historic lows. High gasoline prices, subdued hiring, and contentious politics weigh on sentiment. Since the pandemic, sentiment has increasingly decoupled from spending and other economic indicators, economists say.