February 2025 Consumer Dashboard

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

The US consumer is growing more pessimistic about the economy, but there is still positive news with inflation making progress toward the Federal Reserve’s 2% target.   

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

Personal Consumption Expenditures (PCE)

The core PCE price index, which excludes the volatile food and energy categories, increased 0.28% month over month in January, and the year-over-year rate declined to 2.65%.

Headline prices, which include all items, rose 0.33% month over month and 2.51% year over year.

Market-based core PCE inflation increased 0.24% month over month in January. 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 declined by 0.2% in January, below expectations. Real personal spending fell 0.5% in the same month, reflecting a 1.7% decrease in real goods spending and a 0.1% increase in real services spending.

Goldman Sachs Research economists continue to see the US consumer as a source of strength and forecast a healthy pace of real consumer growth of 2.2% in 2025 in Q4/Q4 terms.

Income

Personal income increased by 0.9% in January, above consensus expectations and partially reflecting a 2.8% increase in Social Security benefits. Employee compensation, proprietors’ income, rental income, dividend and interest income, and transfer income all rose higher in the month.

Goldman Sachs Research forecasts that continued job gains and strong real wage growth should drive 2.5% real income growth in 2025 on a Q4/Q4 basis, with income growth for all income quintiles falling in a relatively narrow 2.4% - 2.6% range.

Wealth

Household balance sheets are still very strong, as the net-worth-to-disposable personal income ratio remains near all-time highs due to strong asset price appreciation over the past year.

The personal savings rate rose to 4.6% in January. Goldman Sachs Research expects the saving rate to increase to 4.8% by the end of 2026.

Debt

Consumer credit growth ticked up in December to 2.4% year over year. Household leverage and debt servicing costs remain low by historical standards.

Credit card delinquencies showed signs of leveling off in the fourth quarter, as new seriously delinquent and new delinquent credit card balances ticked down, although 90-day delinquencies went up slightly.

Subprime auto loan delinquency rates rose slightly, but prime auto loan delinquencies declined in January.

Goldman Sachs Research believes these recent data support their view that delinquency rates are cresting and should stabilize around current levels.

Consumer confidence

The University of Michigan’s Consumer Sentiment Index pulled back to 64.7 in the February report. Data from the prior month suggests the deterioration in sentiment is common across all income and age groups.

The Conference Board Consumer Confidence Index decreased by 7.0 points to 98.3 from an upwardly revised January level – the largest monthly decline since August 2021. The survey noted consumers have become pessimistic about future business conditions and future income.

The US consumer continues to spend at a healthy pace, but the recent US activity data has been softer than expected. In response, our economists lowered their Q1 GDP growth estimate to 1.3% and also decreased their 2025 Q4/Q4 US growth forecast to 1.7%.