Daily Economic Briefing: No need to ask, he‘s a smooth operator

Research evidence excerpt

Daily Economic Briefing: No need to ask, he‘s a smooth operator

J P M O R G A N Global Economic Research

16 July 2026

Daily Economic Briefing

No need to ask, he’s a smooth operator

• Today’s US retail sales report confirmed a 2Q acceleration in consumer Economic and Policy Research

spending, and reiterated households' willingness to smooth through income Maia Crook

shocks. Despite the conflict-induced purchasing power squeeze, we are now (1-212) 622-8435

tracking a 2.5%ar rise in real 2Q consumer spending, up from our prior forecast maia.crook@jpmorgan.com

of 2%. This resilience reflects in part OBBBA tax cuts, which helped to blunt JPMorgan Chase Bank NA

the impact of higher prices. While this impulse should fade in the coming Alex Gallin

months, the consumer is now set to benefit from a continued labor market (1-212) 270-5492

alex.gallin@jpmorgan.com

recovery and falling energy prices. Moreover, the strength of the June gain — JPMorgan Chase Bank NA

a 0.5%m/m increase in core retail sales leaves us tracking a 0.4%m/m rise in

Nora Szentivanyi

real consumer spending — suggests upside risk to our 3Q forecast of 1.4%ar (44-20) 7134-7544

consumer spending. nora.szentivanyi@jpmorgan.com

• Growth in consumer spending has outpaced income growth for most of this J.P. Morgan Securities plc

expansion, and in the last two years led to a remarkable 3%-points slump in the Joseph Lupton

personal saving rate — a drop consistent with the equally remarkable estimated (1-212) 834-5735

joseph.p.lupton@jpmorgan.com

$28tn skyrocketing in household wealth. The stock market-driven consumer JPMorgan Chase Bank NA

spending boom, absent a commensurate rise in real income, underlies the K-

shaped expansion of recent years. Our call is that labor income picks back up