Consumption growth is dampened by higher interest rates outweighing gains from interest income, Ernie Tedeschi analyzes

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06.10.2026

Consumption growth is dampened by higher interest rates outweighing gains from interest income, Ernie Tedeschi analyzes — Higher rates slow consumption growth

Ernie Tedeschi examines recent analysis from Goldman Sachs on the impact of higher interest rates on consumption growth. The research separately models the positive influence of increased interest income but concludes that the negative consequences for interest-sensitive goods outweigh these benefits.

This suggests that while some consumers may see higher income from elevated rates, overall consumption growth remains under pressure due to reduced spending on certain goods.

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Tedeschi has previously highlighted that e-commerce remains below 20 percent of retail trade, suggesting much of consumer activity is still driven by traditional channels. He also reported that the U.S. added 29,000 jobs in September 2026, with unemployment rising to 4.18 percent. These data points provide additional context for assessing the pressure on overall consumption growth.

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