Consumers taking more cautious approach, says Goldman Sachs CEO

Consumers are taking a more cautious approach to spending as the cumulative impact of inflation persists but the economy remains in robust shape, David Solomon, the CEO of Goldman Sachs told delegates at the NYU International Hospitality Industry Investment Conference in New York.

“I think over the last six months, and particularly in the past few months, we've seen and you could see it in the quarterly earnings from a variety of companies, shifts in consumer behaviour, that to me indicate that consumers are taking a little bit more cautious approach to how they're allocating their dollars,” Solomon said.

“I think the reason for it is very, very clear. We talk about inflation, we talk about inflation coming down, but inflation is cumulative. And so things that matter to the average American consumer are 20 to 25%, more expensive today than they were four years ago. And that's a cumulative impact. That I think is starting to have some impact on behaviour.”

However, Solomon was upbeat about the wider economy, saying that it remained in “very good shape,” highlighting two key reasons.

The first was the sustained level of government spending and the second was the benefits of the shift in computing from CPUs to GPUs.

“Those are big tailwinds big, big tailwinds for economic activity here and around the world,” Solomon said.