Contrasting signals for US consumers

Despite moderating somewhat at the end of the year, consumer spending grew by around 2.7% in real terms in 2025, outpacing GDP growth. This result is all the more remarkable given that employment remained virtually stagnant over this period, weighing on household income. There is no mystery behind this apparent disconnect between income and spending: consumers drew on their savings. This cannot be extrapolated indefinitely. Maintaining robust consumer spending – which is the foundation of US growth – in 2026 will require stronger employment conditions and a more significant decline in inflation, something that has yet to materialise.