April 2024 Consumer Dashboard

Here are the latest insights from Goldman Sachs Research on the financial health of the US consumer today.

Consumer spending continued growing strong in March. Let’s take a deeper look at Goldman Sachs Research’s analysis.

Personal Consumption Expenditures (PCE)

The latest economic data showed that the core PCE price index, which excludes the volatile food and energy categories, rose by 0.32% month over month in March, above consensus expectations, and the year-over-year rate edged down to 2.82% from an upwardly revised level in February (2.84%).

Headline prices, which include all categories, increased 0.32% on the month and 2.71% from a year earlier.

Spending

Consumer spending increased by 0.8% in March, two-tenths above consensus expectations. Real personal spending increased by 0.5% in March, reflecting a 1.1% increase in real goods spending and a 0.2% increase in real services spending.

Recent data have also been strong, as nominal retail sales increased by 0.7% month over month in March, and spending in prior months was also revised up. Core retail sales (excluding autos, gasoline, and building materials) increased by 1.1% in nominal terms and 1.2% in real terms.

Goldman Sachs Research economists continue to see consumer spending as a source of strength and forecast above-consensus real spending growth of 2.6% in 2024 in Q4/Q4 terms.

Income

Personal income increased by 0.5% in March, in line with consensus expectations, reflecting a 0.7% increase in nominal wage and salary income.

Nominal disposable income (not adjusted for inflation) increased by 0.5% despite a 0.6% increase in personal taxes.

Wealth

Household balance sheets have strengthened due to asset price increases, which could provide a positive impulse to spending growth in 2024. The net worth-to-disposable personal income ratio remains near its all-time high.

The personal savings rate declined 0.4 percentage points to 3.2% in March. Goldman Sachs Research economist forecast that savings should rise to 3.9% by the end of 2024.

Debt

Consumer credit growth has slowed to 2.5% year over year, and household leverage and debt servicing costs remain low by historical standards.

While credit card delinquency rates have risen recently, likely due to a riskier borrower pool, rising interest expenses, and the restart of student loan payments, auto loan delinquency rates have ticked down from their recent peak.

Goldman Sachs Research economists expect delinquency rates to only rise modestly going forward barring an unexpected labor market deterioration.

Consumer confidence

The Conference Board’s Consumer Confidence Survey decreased in April, its lowest level since July 2022, but signals from higher-frequency consumer sentiment data continued to look somewhat stronger.

The University of Michigan’s Consumer Sentiment Index continued to plateau at 77.2 in its final April reading and was virtually unchanged for the third month in a row. The index provider clarified any sentiment changes within 2.5 index point range is well under the 4.8 points necessary for a statistically significant difference in readings.

Goldman Sachs Research economists found the first quarter GDP growth report shows a still-strong consumer. Domestic demand growth proceeded at a strong pace of 2.8% annualized – a prerequisite perhaps for sustained strong fundamental growth.