40% Gasoline Price Surge Cuts $140B From Incomes, Consumer Confidence Hits Record Low
Goldman Sachs warns 40% higher gasoline costs have trimmed household incomes by $140 billion annualized, dragging real consumption growth projections lower through year-end. The consumer sentiment index plunged 11% month-over-month to 47.6, the lowest reading in its 74-year history.
1. Consumer Spending Forecast Weakens
Goldman Sachs projects weak real consumption growth in coming months as elevated energy costs erode disposable incomes for US households.
2. Gasoline Price Impact
A roughly 40% surge in gasoline prices since early year has created a $140 billion annualized headwind to household incomes, disproportionately affecting lower-income quintiles.
3. Consumer Confidence Dips to Record Low
The consumer sentiment index slid to 47.6, an 11% month-over-month drop to the lowest mark in its 74-year history, reflecting broad-based pessimism across demographics.
4. Implications for Retailers
Softer spending and higher energy costs may pressure retail earnings, especially for department stores and discretionary-focused chains reliant on lower-income consumers.