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business22h ago
It's not a recession. But Goldman says your paycheck is acting like it | Fortune
- Goldman Sachs warns real income per worker declined 0.6% over the past year, indicating a paycheck squeeze without an official recession.
- Tariffs, higher energy prices, and slow wage growth are identified as the culprits behind the real income erosion.
- Goldman notes a K-shaped income trend, with lower-income households bearing the majority of the squeeze.
- Although spending has held up, Goldman warns buffers like tax refunds and savings may not last.
- Goldman projects slower real income growth and consumer spending through 2026, with potential downside if energy prices rise or job growth weakens.
- The report stresses energy prices and geopolitical risk as key risks to the outlook.
- Goldman says cash-flow resilience is narrowing as buffers fade, raising the risk of a sharper slowdown.
- The note emphasizes that the current weakness is not yet a recession, but the trajectory is troubling.
- Goldman’s analysis also points to distortions from previous policies and base effects that will fade.
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