April 2025 Consumer Dashboard

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

US consumers are still spending for now, but continue to have deepening concerns over the economy and potential price increases.

Let’s take a deeper look at Goldman Sachs Research’s analysis.

Personal Consumption Expenditures (PCE)

The March core PCE price index, which excludes the volatile food and energy categories, rose 0.03% month over month, and the year-over-year rate declined to 2.65%. February core PCE was revised up by 13 basis points (bps) to 0.50% month over month.

Headline prices, which include all items, fell 0.04% month over month and rose 2.29% year over year.

Market-based core PCE inflation increased 0.01% month over month in March. This measure includes PCE components that are deflated by either a detailed consumer price index (CPI) or a producer price index (PPI).

Spending

Consumer spending increased 0.7% in March, above expectations. Real personal spending was up 0.7%, reflecting a 1.3% increase in real goods spending and a 0.4% rise in real services spending.

Goldman Sachs Research economists downgraded their US consumer spending forecasts to reflect larger expected headwinds from tariffs. They now forecast only 0.9% real consumer spending in 2025 in Q4/Q4 terms (compared to 3.1% in 2024).

Income

Personal income increased by 0.5% in March, above expectations. Employee compensation, proprietors’ income (mostly reflecting an increase in farm proprietors’ income), rental income, asset receipts, and transfer income all rose in the month.

Goldman Sachs Research’s forecasts for higher inflation due to tariffs and slower job growth could lead to weaker household income growth. Our economists now expect only 0.9% real income growth in 2025 on a Q4/Q4 basis (compared to 2.2% in 2024). Furthermore, the team expects more significant tariff-related headwinds to real spending power and income growth for lower-income households.

Wealth

Household balance sheets are still strong as the net-worth-to-disposable personal income ratio and household home equity remain elevated despite the recent pullback in equity prices, although Goldman Sachs Research no longer expects balance sheets to provide a positive impulse to spending growth in 2025.

The personal saving rate ticked down to 3.9% in March. Goldman Sachs Research expects the saving rate will edge down to around 3.8% by end of 2025 before rising back to 4.6% by the end of 2026.

Debt

Consumer credit growth slowed in February to 1.7% year over year. Household leverage and debt servicing costs remained low by historical standards, although home equity loans continued to grow at a healthy pace.

Credit card delinquencies showed signs of leveling off through the end of last year, with new seriously delinquent and new delinquent credit card balances moderating, although 90-day delinquencies ticked up.

Prime and subprime 60-day auto loan delinquency rates rose slightly in March, and 90-day subprime delinquency rates remained elevated.

Consumer confidence

The University of Michigan’s Consumer Sentiment Index declined across all income cohorts in February and March but was revised up slightly to 52.2 in April in its final report. The survey noted that after the pause on the additional country-specific tariffs on April 9, “inflation expectations ebbed but remained substantially elevated relative to March.”

The Conference Board Consumer Confidence Index fell to 86.0 in April – the lowest level since May 2020 during the pandemic. Additionally, the survey’s measure of inflation expectations 12 months ahead increased to 7%, the highest level since November 2022. The Conference Board noted that consumers “explicitly mentioned concerns about tariffs increasing prices and having negative impacts on the economy.”

Tariff anxiety is showing in consumer and business behavior: Imports surged in the first quarter of the year before the new tariffs were imposed, leading to the largest drag on GDP from net exports (exports minus imports) ever recorded.

Real GDP growth declined 0.3% annualized in the first quarter of this year.

While Goldman Sachs Research does not expect a recession this year as of now, persistent policy uncertainty and economic data may change expectations.