What: Despite ongoing labor market softness, US consumer spending and business investment remain resilient, supporting stable GDP growth forecasts of around 2% through 2027.

Why it is important: This resilience in consumer spending and investment provides a stable foundation for retail planning, even as labor market and policy uncertainties persist.

The US economy continues to demonstrate resilience in the face of ongoing uncertainty. While job gains have slowed to an average of just 29,000 per month over the past quarter and labor force growth remains nearly flat, consumer spending has expanded at a solid pace, buoyed by continued wage growth. Business investment and inventory restocking are also contributing to economic momentum, helping offset the effects of softer hiring. Inflationary pressures from tariffs have not materialized to the extent anticipated, and recent purchasing manager surveys show improvements in both manufacturing and services. As a result, the economy is projected to grow at a 2.6% annualized pace this quarter, with GDP growth expected to stabilize around 2% per quarter through 2027. Although some negative effects from trade policy uncertainty are still anticipated, the outlook for core GDP growth—driven by consumer, business, and government spending—remains steady, providing a measure of predictability for the retail sector.

IADS Notes:

The current US economic outlook is shaped by a complex mix of resilience and uncertainty. As Forbes reported in July 2025, retail sales have outperformed expectations, with a 3.7% annual increase in June, reflecting continued consumer spending strength despite tariff concerns and labor market softness . Visa’s March 2025 and BCG’s April 2025 analyses noted that while consumer confidence hit a three-year low and inflation expectations rose to 6%, wage growth and stable income have helped sustain spending even as job gains slow . The Financial Times in February 2025 and Vogue Business in March 2025 highlighted that consumer anxiety about tariffs has grown, but the anticipated inflationary impact has not fully materialized, as retailers adapt pricing and supply chain strategies . Alix Partners in May 2025 and Inside Retail in April 2025 described how business investment and inventory restocking are supporting economic growth, even as consumer sentiment remains cautious . Visa in October 2024 and WWD in April 2025 observed that, despite nearly flat labor force growth and slow job gains, ongoing wage growth and moderate GDP expansion are expected to keep the economy stable, with GDP growth projected at 2% through 2027 .

US Consumers: Resilience in light of ongoing uncertainty