Report published August 13, 2026
Resilience of Discretionary Consumer Demand: Morgan Stanley Macro Analysis
Source and citation context
- Issuer
- Morgan Stanley
- Report date
- August 13, 2026
- Analysis as of
- Not stated in source
Authors / editors: Arunima Sinha, Heather Berger, Michael T Gapen, Diego Anzoategui, Andrew S Percoco, Sam D Coffin, Lingdi Xu
Finvaulta summarizes Morgan Stanley's analysis. Attribute opinions, forecasts, time-sensitive values, and chronology to the issuer and report date; do not treat this page as an independent verification or a current market-data source.
US real consumer spending shifted toward discretionary goods in 1H26, driven by higher-income household demand for big-ticket items like motor vehicles and furnishings. Morgan Stanley expects real PCE growth to average 2.2% in 2H26 as inflation slows and real income expands, with modest category rebalancing.
Key Takeaways
- 1.Real consumer spending in 1H26 accelerated in discretionary goods categories, driven by big-ticket items concentrated among upper-income cohorts despite tighter financial conditions.
- 2.Real PCE growth is projected to average 2.2% in 2H26 as inflation moderates, labor income improves, and tariff and energy-price headwinds subside.
- 3.Category-level composition will shift in 2H26, with normalization in motor vehicles and furniture, a potential rebound in clothing/footwear, and upside risk in recreational goods due to upcoming BEA software deflator revisions.
Table of Contents
- Key Takeaways
- Our takeaways from recent spending data, and our expectations for 2H26
- Takeaways from the consumption data in 1H26
- Which categories drove the uptick in goods spending in 1H26?
- What does the recent strength in goods spending implies around the health of consumer cohorts?
- What about discretionary services?
- What does this imply for discretionary spending going forward?
- Disclosure Section
Report data
Exhibit 1: In 1H26, the spending on discretionary categories accelerated relative to 2025
| Metric | Estimate | Context |
|---|---|---|
| Real Consumption Growth (1H26 Average) | 1.8% | Real consumption growth averaged 1.8% in 1H26 relative to 1.5% in 1H25 |
| Forecast Real PCE Growth (2H26 Average) | 2.2% | Expected average real PCE growth in 2H26 as inflation decelerates |
| Real PCE Growth (2Q26) | 3.2 % q/q saar | Real PCE rose 3.2% q/q saar in 2Q, led by goods (+5.2%) and services (+2.2%) |
| Durable Goods Growth (2Q26) | 6.8 % q/q saar | Durable goods rebounded 6.8% led by motor vehicles and furnishings |
| Real Restaurant Spending Growth (2Q26) | 4.74 % q/q saar | Real restaurant spending rebounded after -3.4% in 1Q |
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Authors / Editors
Reported Data Context
- Real Consumption Growth (1H26 Average): 1.8 % (1H26) · Source: BEA, Haver Analytics, Morgan Stanley Research
- Forecast Real PCE Growth (2H26 Average): 2.2 % (2H26) · Source: Morgan Stanley Research
- Real PCE Growth (2Q26): 3.2 % q/q saar (2Q26) · Source: BEA
- Durable Goods Growth (2Q26): 6.8 % q/q saar (2Q26) · Source: BEA
- Real Restaurant Spending Growth (2Q26): 4.74 % q/q saar (2Q26) · Source: BEA, Haver Analytics, Morgan Stanley Research