Consumer spending

Consumer spending is set to rise 2.1% in 2026 to reach $16.86 trillion, having grown at a CAGR of 2.7% over the five years through 2026. The deployment of vaccines during 2021 facilitated economic reopening, driving consumer spending during the second half of the year. Just as well, Congress passed further fiscal support measures, totaling $1.9 trillion in March 2021. The overwhelming nature of the stimulus plan elevated growth prospects for the United States, leading to consumer spending rising 8.8% during 2021 alone as pent-up demand combined with extra disposable income led to heightened levels of consumer spending.

In 2022, mounting demand resulted in supply chain bottlenecks and rising consumer prices, which contributed inflation levels rising to its highest point since the early 1980s. Additionally, global tension amid the ongoing war in Ukraine drove up global energy prices, tempering consumer spending on goods and services. In response to surging inflation, the Federal Reserve aggressively raised interest rates six times in 2022 to ease the effects of inflation. As a result of increased rates, consumer spending slowed in 2022, only rising 3.0%. In 2023, consumer spending growth remained limited by further interest rate hikes as the Federal Reserve once again decided to raise the Federal Funds Rate by a quarter point during May and July. This resulted in a target range of 5.25% to 5.50%. Despite high rates discouraging growth however, consumer spending remained resilient, partially due to job growth throughout the country. As a result, consumer spending grew 2.6% in 2023. After declining rates during 2024 led to continued growth during the year, consumer spending grew 2.7% during 2025 amid rate cuts and uncertainty from tariffs.