Consumer Spending

Extracted Attributes

• Component

  Autonomous consumption (independent of income)

• Definition

  The total money spent on final goods and services by individuals and households.

• Influencing Factor

  M&A Regulation (can indirectly impact market liquidity and innovation)

• Measurement Authority

  Bureau of Economic Analysis (BEA)

• Measurement Indicator

  Personal Consumption Expenditures (PCE)

• Forecast Q2 2024 (J.P. Morgan)

  3.0% (revised up from 2.0%)

• Forecast Year-over-Year 2025 (J.P. Morgan)

  2.3%

• Forecast Nominal Spending 2025 (Morgan Stanley)

  3.7% year-over-year growth

• Forecast Nominal Spending 2026 (Morgan Stanley)

  2.9% year-over-year growth

Timeline

• Smallest gain in consumer spending on services since this month. (Source: web_search_results)

  2020-11-01

• U.S. consumer spending started the year on solid footing, increasing 5.5% in the first quarter from the same period of 2024. (Source: web_search_results)

  2024-01-01

• Consumer spending gained 0.2% (unrevised) in April. (Source: web_search_results)

  2024-04-01

• Chase card spending data showed total spending growth ticked down month-over-month to approximately 2.1%, while discretionary spending was up approximately 2.6% month-to-date. (Source: web_search_results)

  2024-05-20

• Consumer spending dropped 0.1% in May, marking the second decline this year. (Source: web_search_results)

  2024-05-01

• J.P. Morgan Research forecasts consumer spending to rise 2.3% year-over-year for 2025. (Source: web_search_results)

  2025-01-01

• Morgan Stanley Research forecasts year-over-year growth of 3.7% for nominal spending in 2025. (Source: web_search_results)

  2025-01-01

• Morgan Stanley Research forecasts year-over-year growth of 2.9% for nominal spending in 2026, with a likely cooldown in the first three months. (Source: web_search_results)

  2026-01-01

Consumer spending

Consumer spending is the total money spent on final goods and services by individuals and households. There are two components of consumer spending: induced consumption (which is affected by the level of income) and autonomous consumption (which is not).

Web Search Results

• Consumer Spending Trends | J.P. Morgan Research

  In light of the recent data, the Economics team from J.P.Morgan Research has revised its second-quarter consumer spending forecast to 3.0% — up from 2.0% previously. Overall, consumer spending is expected to rise 2.3% year-over-year for 2025. [...] April’s headline and core (excluding food and energy) Consumer Price Index (CPI) prints came in at 0.2% month-over-month, slightly below expectations. However, overall prices are still 2.3% higher than they were a year ago, largely driven by shelter, food and car insurance costs. [...] However, Chase card spending data suggests consumers aren’t tightening their purse strings just yet. While total spending growth for May ticked down month-over-month to ~2.1% as of May 20, discretionary spending was up ~2.6% month-to-date. Non-discretionary spending grew ~1.2%, likely reflecting the impact of lower gas prices.

• Which Economic Factors Most Affect the Demand for Consumer ...

  Consumer spending is measured by the personal consumption expenditures (PCE) indicator produced by the Bureau of Economic Analysis (BEA).7 The Bottom Line --------------- [...] The level of wages also affects consumer spending. Consumers generally have more discretionary income to spend if wages are steadily rising. Demand for optional consumer goods is likely to fall when wages are stagnant or dropping. Median income is one of the best indicators of the condition of wages for American workers. Prices and Interest Rates ------------------------- [...] Prices are affected by the rate of inflation so they significantly impact consumer spending on goods. The producer price index (PPI) and the consumer price index (CPI) are considered leading economic indicators for this reason.2 3 Higher inflation rates erode purchasing power, making it less likely that consumers have excess income to spend after covering basic expenses such as food and housing. Higher price tags on consumer goods also deter spending.

• US consumer spending falls; tariff-related boost to inflation awaited

  Consumer spending, which accounts for more than two-thirds of economic activity, dropped 0.1% last month after an unrevised 0.2% gain in April, the Commerce Department's Bureau of Economic Analysis said. That was the second decline in consumer spending this year. Economists polled by Reuters had forecast consumer spending would edge up 0.1%. [...] Goods spending dropped 0.8% amid a 1.8% decline in outlays of long-lasting manufactured goods, mostly motor vehicles. Spending on nondurable goods like gasoline and food also fell, with the former reflecting lower prices at the pump. Consumer spending on services ticked up 0.1%, the smallest gain since November 2020. Services outlays were restrained by decreases in spending on hotel and motel accommodation as well as at restaurants and bars. [...] Consumer spending nearly braked last quarter after being propelled by households pulling forward goods purchases. Households also spent less on services last quarter, helping to restrain growth in consumer spending to only a 0.5% annualized pace, the slowest rate since the second quarter of 2020. A record goods trade deficit in the first quarter, thanks to a deluge of imports, accounted for much of the 0.5% rate of decline in gross domestic product during that period.

• U.S. Consumer Spending Trends to Watch in 2025 - Morgan Stanley

  After starting 2025 on solid footing, U.S. consumer spending is likely to weaken through the rest of the year and into 2026 as households feel the effects of tariffs and economic uncertainty. Morgan Stanley Research forecasts year-over-year growth of 3.7% for nominal spending in 2025 and 2.9% in 2026, compared with an expansion of 5.7% in 2024. The cooldown is likely to be more pronounced in the last quarter of 2025 and the first three months of 2026. [...] Despite the forecast of more caution ahead, recent data still show a resilient consumer. Spending increased 5.5% in the first quarter from the same period of 2024. “Although some of that growth likely reflected some hasty purchases in anticipation of higher tariffs, the pace of expansion suggests that consumers still have a healthy balance sheet and are willing to spend,” Sinha says.

• Top Macroeconomic Factors Influencing Consumer Behavior in 2023

  Employment and Wages -------------------- Consumer spending is entirely dependent on surplus income—the more people receive a steady income (and continue to receive one), the more consumers are willing to make discretionary purchases. [...] Likewise, wages play a part in consumer spending. If wages are steadily rising, consumers generally have more discretionary income to spend, but if they are stagnant or falling, demand for optional consumer goods is likely to fall. Median income is one of the best indicators of the condition of wages for American workers.