Economists warn tax refund boost fades, forecasting weaker retail sales and stagnant real cash flow ahead.
Goldman Sachs economists project US consumer spending growth will slow to 1-1.5% in the second half of 2024. The forecast follows a 5.9% year-over-year rise in sales among S&P 500 consumer discretionary firms in Q2, driven by higher-than-expected tax refunds.
Second-quarter same-store sales accelerated across income groups, but economists caution the momentum is temporary. Real consumer spending grew 3.2% in Q2, up from 1.5% GDP expansion, though cash flow stagnation is expected to weigh on demand.
July retail sales dipped, partly due to an early Amazon Prime Day, reinforcing concerns about a broader slowdown. The note highlights fading fiscal support as a key risk to consumption trends.