Goldman Sachs warns of consumer spending slowdown as tax refund boost fades

Live updates

1. 73d ago

   US Retail Sales Suffer Largest Drop in Over a Year

   US retail sales fell sharply in July, marking the most significant decline in more than a year. The drop was unexpected and coincided with a fall in the value of the US dollar. Goldman Sachs attributes this spending slowdown to the fading impact of tax refund boosts. Shoppers are reportedly feeling financial pressure, leading to a sharp reduction in retail expenditures.

   Why it matters

   Consumer spending is a primary driver of the US economy. A sustained decline suggests that previous fiscal supports, such as tax refunds, are no longer offsetting price pressures for shoppers.

   What is confirmed

   • US retail sales experienced their largest drop in more than a year.
   • US consumers reduced retail spending sharply in July.

   Still unconfirmed

   • The US dollar fell following the surprise drop in retail sales.
   • Goldman Sachs warns that the spending slowdown is linked to fading tax refund boosts.
   • The drop in retail sales was unexpected.

   What to watch next

   • August retail sales data
   • Federal Reserve commentary on consumer spending trends
   Sources used for this update (6)

   1. Bloomberg.com — US Retail Sales Fall by the Most in More Than a Year
   2. CNN — US consumers cut retail spending sharply in July
   3. The New York Times — Unexpected Drop in U.S. Retail Sales as Shoppers Feel the Squeeze
   4. CNBC — Dollar falls on surprise drop in U.S. retail sales
   5. ABC News - Breaking News, Latest News and Videos — Video Retail sales post largest drop in more than a year
   6. Yahoo Finance — Goldman Sachs warns of consumer spending slowdown as tax refund boost fades
   confidence 80%