Goldman Sachs economist sees ‘a slowdown in consumer spending’

Goldman Sachs economist sees ‘a slowdown in consumer spending’

High inflation and rising interest rates are likely to start pressuring consumer spending, warns Goldman Sachs economists.

"Alternative data indicate a slowdown in consumer spending in late April and early May—perhaps in response to tighter financial conditions and higher consumer prices," Goldman chief economist Jan Hatzius stated in a new note. "The 10-year low in consumer sentiment in early May suggests some of this weakness could continue in late May and possibly June."

The closely watched economist slashed his second quarter GDP estimate to 2.5% from 2.9%. Consensus estimates are looking for a 3% increase in GDP, a bounce-back from the 1.4% decline in the first quarter.