Investing.com -- Goldman Sachs lowered its 2026 discretionary cash inflow growth expectations for US consumers to 3.7% from a previous forecast of 4.2% made in early April 2026, marking the second downward revision since January 2026.

The investment bank reduced its disposable personal income growth expectation to 4.7% from 5.0% for 2026. Goldman Sachs economists now expect OBBBA tax cuts to be offset by higher capital gains tax payments this tax season, anticipating a roughly unchanged tax bill year-over-year compared to earlier expectations of a boost to household income growth this spring.

Goldman Sachs oil strategists raised their fourth quarter 2026 Brent forecast to $90 per barrel from $80 per barrel on lower Persian Gulf production. The bank now assumes a normalization in Gulf exports by end-June instead of mid-May and expects a slower Gulf production recovery.

Energy spending is now projected to grow by 14.4% in 2026, up from a previous estimate of 12.3%, reflecting higher energy futures. Essential expenditures are modeled to grow by 7.4% in 2026, unchanged from prior estimates and well above the 4.3% growth seen in 2025.

The combination of lower disposable personal income growth and higher essential expenditures translates into 3.7% discretionary cash inflow growth in 2026, representing a marginal sequential decline compared to 4.0% growth in 2025.

Goldman Sachs presented a sensitivity analysis showing that for every 10%, 15%, and 20% increase in energy-related spending relative to current assumptions, pre-savings discretionary cash flow would be impacted by 51 basis points, 77 basis points, and 102 basis points respectively.

The bank sees over 50 basis points headwind for consumer discretionary spending power for US households in aggregate in 2026, and approximately 135 basis points headwind for the bottom quintile, assuming $100 per barrel pricing holds.