World Brief: Global Spending Slows as Inflation Eases

What happened

Inflation slowed across major economies, yet consumer spending weakened faster than expected. Retail and service activity cooled, suggesting many households remain cautious despite lower energy and food prices.

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Why it matters

Household spending drives two-thirds of global GDP. When consumers hold back, growth slows. Policymakers now face a delicate balance: keeping inflation stable without tipping economies into stagnation.

• In the U.S. holiday sales are slower, with discounting at record highs.
• In Europe, real wages are rising slightly, but savings remain elevated.
• In Asia, China’s consumers are saving more amid uncertain job markets.

By the numbers

• Global inflation: 3.2% (down from 4.9% a year ago)
• Retail sales volume: -1.1% month-on-month average across G20
• Personal savings rate: ↑ 1.8 pts globally since midyear

The bigger picture

Analysts call this a “post-inflation adjustment”—people are recalibrating, not panicking. Lower price growth restores purchasing power, but habits formed during the inflation surge persist. Central banks are likely to hold rates steady into early 2026, watching confidence data.

Sources

• IMF Outlook
• OECD Data
• BIS Reports

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