Why isn’t consumer spending rebounding?
August 05, 2026
The consumer rebound many expected in 2026 has yet to materialize. While lower energy prices have eased some of the pressure on household budgets, spending data suggests consumers remain cautious rather than eager to ramp up purchases. “With consumers relying on tapping savings through the energy price shock to smooth out consumption, it seems more likely that the decline in energy prices will be pocketed to refill savings buffers than to fuel a renewed jump in consumption,” says Garrett Melson, CFA®, Portfolio Strategist at Natixis Investment Managers Solutions. With wage growth continuing to cool, consumer spending may remain under pressure.
- Real consumption grew 1.3% over the first five months of 2026 as higher inflation and softer wage growth offset support from tax cuts.
- Credit- and debit-card spending measures from Bloomberg Second Measure and the Chicago Fed CARTS model have recently weakened, suggesting consumer momentum may be softer than some retail sales indicators imply.
- Continued disinflation could provide some support for spending, but soft labor market conditions and slowing wage growth may limit the upside for consumers.
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