Summary
This report presents an analysis of consumer spending trends as of May 2026, based on PNC Economics Research data. It details that consumer spending has accelerated, with a year-over-year increase of 5.3% in April, indicating resilience despite rising gasoline prices due to the ongoing conflict in Iran. The report outlines how fiscal support, including larger tax refunds and lower withholding taxes, has helped maintain spending levels, particularly among lower-income households. It notes that while spending growth has been broad-based, the gap between lower- and higher-income households has narrowed. However, the report cautions that this improvement may not be sustainable, as households are depleting tax refunds more quickly than in previous years. Furthermore, it highlights signs of labor market improvement, with increased direct deposits and payroll income growth, which may continue to support consumer spending in the near term. The report concludes by discussing the potential for moderation in spending growth as fiscal support diminishes.
