💡 TL;DR: Inflation is easing, but shoppers are cautious—spending less, saving more.
[rg-time] • Global Economy • Follow topic • ~3 min read
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.
Share: “Inflation is down, but wallets are still tight.” [rg-copylink]
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.