Goldman Sachs forecasts K-shaped economy and weak consumption growth in 2026

4 articles · Updated · Fortune · Apr 24

Goldman Sachs projects a 1% decline in headline retail sales, with lower-income households facing the greatest impact due to higher gasoline prices, tepid job growth, and cuts to Medicaid and SNAP benefits.
The bank expects notably firmer income growth for middle and higher-income groups, who are less exposed to oil shocks and benefit more from recent fiscal measures, while low-income spending underperforms.
Economists debate the extent of current K-shaped trends, but Goldman Sachs anticipates the divergence between income groups will become more pronounced later in 2026, especially in housing and discretionary spending.

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