Goldman Sachs Flags Consumer Slowdown as Retail Sales Falter

Goldman Sachs has issued a warning about a potential consumer slowdown that could impact the US economy. The bank points to a decline in retail sales and a looming decrease in tax refunds as key indicators of this trend.

In its analysis, Goldman estimates that real consumer spending growth could slow to as low as 1% in the second half of 2026, down from the current pace of 2.5%. This would mark the slowest rate of spending since early 2021, when the economy was still recovering from the pandemic recession.

The bank notes that Americans are already showing signs of tightening their wallets, with retail sales dropping 0.6% in July. While this decline may be partly due to an earlier-than-usual Amazon Prime Day, Goldman suggests that it is a sign of a broader trend.

According to Ronnie Walker, a senior economist at the bank, 'The revised sequential path now looks much more consistent with our view that the strength of real consumer spending in the spring was the temporary byproduct of the tax refund surge. We expect real consumer spending growth to slow to 1-1.5% in H2 as real cash flow stagnates.'

Walker's comments suggest that consumers are facing increasing pressure due to higher energy prices and fading tailwinds from tax refunds.