Economist: Rising Energy Costs Weaken U.S. Household Consumption Capacity

Odaily News Paolo Zanghieri, Senior Economist at Generali Investments, pointed out that the continuous rise in energy costs and persistent inflation are impacting U.S. households at a time when real income growth has already slowed, leading to a weakening momentum in consumption growth. It is projected that the consumption growth rate for U.S. households in 2026 will be only 1.7%, about one percentage point lower than in 2025. The main reason for the slowdown in consumption growth is the deterioration in the labor market. Employment growth in the private sector has largely stagnated, hiring activity is at its lowest level since April 2020, and the decline in the quit rate suggests that future wage growth will slow down. (Jin10)