JPM US Final sales rush

J P M O R G A N North America Economic Research 30 July 2026

US: Final sales rush ahead of overall GDP in 2Q (GDP, PCE)

• June PCE featured a downside surprise on core PCE (0.13%m/m, Economic and Policy Research 3.3%oya, 2.9% 3m saar) Abiel Reinhart ( • This is just one month, and if inflation firms again in coming months support for a rate hike on the FOMC should grow JPMorgan Chase Bank NA • Consumption growth was strong again in June (0.4%m/m), leading to another fall in the oft-revised saving rate, and we expect households to soon moderate their spending pace • 2Q GDP rose 1.5%, in line with expectations, while private domestic final sales surged 3.9% • In addition to solid 2Q consumer spending, final sales were led by more robust equipment and IPP investment • Computer equipment investment growth stalled, but other categories took up the slack, leading to another strong investment quarter

June PCE For Fed watchers the most striking takeaway from the June PCE report was perhaps the moderate reading on the core PCE deflator. It rose just 0.13%m/m (1.6%m/m ar, the lowest since March 2025), which is quite far below our 0.22% forecast and thus closer than expected to June’s flat core CPI reading. Still, this is just one month, and with the 12-month change still elevated at 3.3% the attention turns to the upcoming inflation reports. There will be two CPI reports between now and the September FOMC meeting. Another couple of moderate readings could encourage patience on the FOMC, but if the upcoming data show that June was just a downside outlier a widening set of committee members could push for a rate hike, assuming there is no sudden weakening in the labor market.

Core PCE deflator and core PCE goods Core PCE inflation: regular and market-based %m/m, sa %oya Core PCE Core PCE Market-based Core PCE goods - Source: BEA, J.P. Morgan Source: BEA, J.P. Morgan

The market-based core PCE deflator was slightly firmer at 0.18%m/m, though both the regular and market-based core rose 2.9% saar in the last three months. All the key categories rose at a similar rate to the overall core PCE in June, with goods increasing 0.09%m/m, services 0.15%, and services ex housing (supercore) 0.12%. Goods inflation, which is largely based on the CPI but with some weighting differences, has moderated sharply in the last couple of months. For services, this was the smallest gain in just over two years, though it follows a firm reading in May.

See page 6 for analyst certification and important disclosures.

Abiel Reinhart North America Economic Research ( July 2026 JPMORGAN

Lower services inflation benefitted from both low housing inflation and a large drop in the index for nonprofit institutions, which shaved off about 4bp from the core.

Turning to the rest of the report, consumer spending remains strong, though that continues to outpace disposable income, leading to an ongoing fall in the saving rate. Real consumption rose 0.4%m/m, slightly more than the 0.3% rise in real disposable personal income. The saving rate fell to 2.7%, which is now down 0.9% in just the last six months. In the second quarter households saw a real income drag from higher gas prices, though tax stimulus was likely still providing a tailwind, in addition to ongoing wealth gains. With gas prices remaining elevated and tax stimulus fading the household sector may retrench somewhat in coming quarters, though the tendency of the saving rate to be revised up means it is still unclear how much that metric has truly deteriorated. We still expect 3Q consumption to rise 1.75%, which incorporates the assumption of weak July retail sales being signalled by our Chase card data1 .

Real consumption and real income growth Personal saving rate %ch 3m/3m, saar DPI Percent, sa 8 Wages Consumption - Source: BEA, J.P. Morgan Source: BEA, J.P. Morgan

2Q GDP 2Q real GDP rose 1.5%q/q, saar, in line with our revised expectations following Tuesday’s trade and inventory data. The broad story here is that private domestic final sales were strong (3.9%), driven by consumption (3.2%), equipment (15.2%), and IPP (8.8%), though with an offset primarily from trade and inventories. Trade and inventories together took…