Consumer confidence also weakened in August
Americans are starting to feel the strain from rising prices, even as consumer spending remains relatively strong.
Higher fuel costs linked to the Middle East conflict are making everyday expenses harder to manage. Gas prices reached a record August high of $4.06 per gallon on Monday.
As a result, shoppers are starting to change their spending habits. Beef purchases have fallen as prices climb, while some consumers are eating out less and choosing cheaper protein options.
These changes signal weaker consumer spending in the months ahead.
Goldman Sachs expects spending growth to slow to just 1% to 1.5% in the second half of the year.
Consumer confidence also weakened in August, raising concerns that persistent inflation could become a bigger economic and political problem ahead of November’s midterm elections.