Global households are cutting real spending because soft labor markets cap wage growth while prices continue rising, forcing consumers to draw down savings. This consumer pullback signals weakening aggregate demand, which pressures economic growth and poses headwinds for consumer discretionary sectors.
•Labor markets are soft enough to keep a lid on wage growth.
•Prices are rising, eroding household purchasing power.
•In response, most households are drawing down savings to maintain spending.
•The challenge is nearly universal across global households.