Despite a weaker job market and slowing income growth, U.S. consumer spending is expected to hold up in 2026, Fitch Ratings says.
In a report published Wednesday, the rating agency forecasts that the consumer-driven consumption will continue to grow this year, bolstered by robust household finances — strong equity markets boosted household net worth last year — even as the growth of disposable income slows.
Fitch expects household consumption to grow by 1.7% in the coming year, down a bit from the 2.1% average growth that it projects for 2025.
“U.S. consumer spending has been surprisingly resilient since the second half of 2025 as tariff concerns have receded,” said Olu Sonola, head of U.S. economic research at Fitch, in a research note.
In the third quarter, consumer spending rose at a 3.5% annualized rate, Fitch said, up from 2.6% the previous quarter, and just 0.6% in the first quarter of 2025.
This acceleration in spending came as household net worth hit record highs by the end of the third quarter, Fitch noted, “which was likely responsible for a consumer spending tailwind in 2025.”
However, real disposable income growth slowed to just 1.6% on a year-over-year basis in December 2025, it noted, down from 2.8% in 2024, “due in part to a softening labour market.”
Higher-income households are enjoying stronger nominal wage gains than lower-income households, Fitch said, and inflation is hitting lower-income households harder too.