Stock Markets April 28, 2026 09:04 AM

Goldman Lowers 2026 U.S. Consumer Discretionary Cash Inflow Forecast Citing Higher Oil Costs

Bank trims disposable income outlook and raises Brent oil price projection as Gulf output recovers more slowly than expected

By Marcus Reed
Goldman Lowers 2026 U.S. Consumer Discretionary Cash Inflow Forecast Citing Higher Oil Costs

Goldman Sachs has reduced its forecast for U.S. consumer discretionary cash inflow growth for 2026 to 3.7% from 4.2%, citing both a weaker outlook for disposable personal income and higher projected energy costs. The bank also raised its fourth-quarter 2026 Brent crude forecast to $90 per barrel and expects a slower normalization of Persian Gulf exports, which together push up energy spending projections and weigh on household discretionary spending power.

Key Points

  • Goldman lowers 2026 U.S. discretionary cash inflow growth forecast to 3.7% from 4.2%, the second cut since January 2026.
  • Disposable personal income growth for 2026 reduced to 4.7% from 5.0%, as expected capital gains payments offset OBBBA tax cuts.
  • Goldman raises Q4 2026 Brent forecast to $90 per barrel and pushes back expected normalization of Persian Gulf exports to end-June, boosting 2026 energy spending projections to 14.4%.

Goldman Sachs has revised down its outlook for U.S. consumer discretionary cash inflow growth for 2026, lowering the estimate to 3.7% from the 4.2% projection it made in early April 2026. This adjustment marks the second downward revision the bank has made since January 2026.

The investment bank also trimmed its forecast for disposable personal income growth in 2026 to 4.7% from a prior 5.0% projection. Goldman Sachs economists now expect that the OBBBA tax cuts will be effectively offset by larger capital gains tax payments in the current tax season. As a result, the bank anticipates a year-over-year tax bill for households that is roughly unchanged compared with previous expectations that had predicted a boost to household income growth in the spring.

On the energy front, Goldman Sachs' oil strategists increased their Brent crude price outlook for the fourth quarter of 2026 to $90 per barrel from $80 per barrel. The firm attributes the higher price path to reduced production in the Persian Gulf region. Goldman now assumes Gulf exports will normalize by the end of June rather than by mid-May and expects a slower pace of production recovery from the region.

Those higher energy price assumptions feed directly into Goldman Sachs' consumer spending models. The bank raised its projection for energy spending growth in 2026 to 14.4% from a prior estimate of 12.3%, reflecting elevated energy futures. Meanwhile, essential expenditures are modeled to increase by 7.4% in 2026, a figure unchanged from the bank's earlier estimate and considerably above the 4.3% essential spending growth recorded in 2025.

The combined effect of a lower disposable personal income growth forecast and stronger essential spending growth produces the 3.7% discretionary cash inflow estimate for 2026. Goldman Sachs notes this represents a marginal sequential decline relative to the 4.0% discretionary cash inflow growth it recorded for 2025.

Goldman Sachs also published a sensitivity analysis to show how changes in energy-related spending could affect pre-savings discretionary cash flow. The analysis indicates that, relative to current assumptions, a 10% increase in energy spending would reduce pre-savings discretionary cash flow by 51 basis points, a 15% increase would trim it by 77 basis points, and a 20% increase would lower it by 102 basis points.

The bank quantifies the impact on household spending power as well. In aggregate, U.S. households face just over a 50 basis point headwind to consumer discretionary spending power in 2026 under the bank's scenario. The bottom income quintile would see a larger effect - roughly a 135 basis point headwind - under an assumption of $100 per barrel oil pricing.


Key points:

  • Goldman cuts 2026 discretionary cash inflow growth to 3.7% from 4.2%.
  • Disposable personal income growth forecast lowered to 4.7% from 5.0%.
  • Fourth-quarter 2026 Brent forecast raised to $90 per barrel as Gulf output recovers more slowly.

Impacted sectors: Energy and consumer discretionary are directly affected by the revisions, with tax developments influencing household income and spending across the broader economy.

Risks and uncertainties:

  • Slower-than-expected Persian Gulf production recovery - affects oil markets and energy spending projections.
  • Higher capital gains tax payments offsetting OBBBA tax cuts - introduces uncertainty into household disposable income outcomes.
  • Sensitivity of discretionary cash flow to further increases in energy-related spending - particularly acute for lower-income households if oil reaches $100 per barrel.

Risks

  • Slower Persian Gulf production recovery could keep oil prices elevated, increasing energy spending and reducing discretionary cash flow - impacts energy and consumer sectors.
  • Higher capital gains tax payments may negate expected tax-cut benefits to households, creating uncertainty in disposable income and consumer spending patterns - impacts household finances and retail demand.
  • Further increases in energy-related spending would materially reduce pre-savings discretionary cash flow, with disproportionate effects on lower-income households - impacts consumer discretionary demand.

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