🕒 Created · Updated

Jan Hatzius Warns of Slowing Consumer Spending as July Retail Sales Unexpectedly Decline

Goldman Sachs economist Jan Hatzius warned that U.S. consumer spending growth is expected to slow in the second half of the year as real cash flow stagnates. This outlook follows a report from the Commerce Department showing that retail sales fell 0.6% in July, a significant drop from the 0.2% gain in June and well below the 0.1% growth projected by economists. While consumer spending has shown resilience through various economic challenges, including the uncertainty of policy changes during the second term of President Trump, the recent data suggests a shift. The July decline was partially influenced by lower gasoline prices and a drop in online sales, which saw the2.2% decrease. Analysts suggest that the softer retail data, combined with a weakening labor market, may reduce the likelihood of the Federal Reserve raising interest rates in the near term. The market is currently pricing in a lower probability of a September rate hike as traders weigh the impact of these figures against global currency trends.

Sources