Deloitte’s August 2026 State of the U.S. Consumer report, published August 26 by the firm’s Consumer Industry Center, found that spending intentions for both nondiscretionary and discretionary categories resumed an upward trend after a period of sideways movement that had persisted through the spring and early summer. Healthcare spending intentions posted the sharpest increase among essential categories, a signal that American households are prioritizing medical expenses as insurance premiums, out-of-pocket costs, and prescription drug prices climb faster than wages or general inflation for the second consecutive year.
Key Takeaways
- Deloitte’s August ConsumerSignals report found that spending intentions rose across both nondiscretionary (essentials) and discretionary categories, reversing a period of flat readings that had defined the spring and early summer months.
- Healthcare spending intentions showed the sharpest increase among essential categories, reflecting consumer prioritization of medical expenses amid premium increases that have outpaced wage growth and inflation in 2026.
- Financial well-being held steady for the third consecutive month and remains above year-ago levels, suggesting that consumers are not yet in acute distress but are reallocating budgets toward necessities.
- Price expectations continue to fluctuate with sharp month-to-month swings, indicating that consumers have not settled on a stable inflation outlook.
- The simultaneous rise in discretionary spending intentions alongside nondiscretionary gains signals consumer resilience rather than a purely defensive posture, according to Deloitte.
- The data arrives alongside a July CPI reading of 3.4% year-over-year, core PCE at 3.7%, and a University of Michigan August consumer sentiment decline of nearly 8% with inflation expectations rising to 4.3%.
Healthcare Spending Leads the Uptrend in Essential Categories
The Deloitte report’s finding that healthcare spending intentions have resumed their upward trajectory is not a surprise when measured against the cost environment American consumers are navigating in 2026. Healthcare has become the single category where spending is least voluntary and most resistant to consumer pullback, regardless of sentiment or confidence levels. When premiums rise and out-of-pocket costs increase, consumers do not have the option to defer the expense the way they might delay a vacation or postpone a furniture purchase. The spending goes up because the costs go up, and the Deloitte data captures that dynamic in real time.
The cost pressures are structural and documented. Enhanced Affordable Care Act premium tax credits expired at the end of 2025, triggering what the Kaiser Family Foundation calculated as a 58% average increase in out-of-pocket premiums for marketplace enrollees in 2026, from approximately $113 per month to $178 per month. Deductibles rose by approximately $1,000 per person. For the 92% of marketplace enrollees who had been receiving enhanced credits, the KFF estimated a 114% premium increase, with average annual costs rising from $888 to $1,904. A KFF survey found that more than half of returning marketplace enrollees reported reducing spending on food or basic household items in order to afford their health insurance premiums.
The pressure extends beyond the ACA marketplace. Medicare Part B premiums increased 9.7% to $202.90 per month in 2026, the first time the monthly premium exceeded $200 and more than three times the 2.8% cost-of-living adjustment applied to Social Security benefits. Employer-sponsored health insurance premiums are projected to rise between 6.7% and 9% in 2026, according to Mercer, with employers shifting more costs to workers through higher deductibles and copays. The Peterson-KFF Health System Tracker noted that consumers now identify healthcare as the center of the affordability crisis, ranking it above food, rent, and utilities in surveys about cost burden.
GLP-1 drugs, including Wegovy and Zepbound, have added a new cost vector. At more than $1,000 per month per patient, the rapid adoption of these medications for weight management has increased the risk pool costs that insurers pass through to all enrollees in the form of higher premiums. The “GLP-1 effect,” as PolicyNewsHub termed it, represents a structural cost driver that did not exist at scale three years ago and is now embedded in the premium calculations for both employer-sponsored and individual market plans.
Discretionary Spending Intentions Rise Too, Complicating the Narrative
The Deloitte report’s most nuanced finding is that discretionary spending intentions also rose in August, alongside the nondiscretionary gains. Stephen Rogers, managing director of Deloitte’s Consumer Industry Center and the report’s author, framed the simultaneous increase across both categories as a signal of consumer resilience rather than strain. If consumers were purely in defensive mode, cutting discretionary budgets to fund essential expenses, the discretionary line would have declined while essentials rose. Instead, both moved higher, suggesting that at least a portion of American households retain enough financial capacity to maintain spending across categories.
That reading requires context. Consumer resilience in aggregate does not mean uniform resilience. The American consumer population is not a monolith. Higher-income households, which account for a disproportionate share of total consumer spending, may be sustaining both essential and discretionary expenditures without difficulty. Lower-income households, who are most exposed to ACA premium increases, SNAP benefit reductions, and wage growth that lags services inflation, may be cutting in ways that do not show up in the aggregate spending intentions data.
The Deloitte report tracks intentions, not actual expenditures. Intentions data captures what consumers plan to do with their budgets in the coming months. Actual spending data, which lags by several weeks, will reveal whether those intentions translated into transactions. The gap between intention and action tends to widen when economic uncertainty increases, as consumers report plans to spend but then pull back when faced with the reality of their bank balances, credit limits, and competing obligations.
Financial Well-Being Holds but Price Expectations Remain Volatile
The report found that consumer financial well-being held steady for the third consecutive month and remains above year-ago levels. That stability is meaningful because it suggests the consumer is not in freefall. Savings buffers, employment income, and household balance sheets are holding together in aggregate, even as specific cost categories like healthcare, shelter, and transportation continue to pressure budgets.
Price expectations, however, are unstable. The Deloitte report noted that consumer price expectations continue to fluctuate with sharp month-to-month swings, replacing any settled outlook with a pattern of volatility. That finding aligns with the University of Michigan’s August consumer sentiment survey, which showed one-year inflation expectations rising to 4.3% from 4.2% in July. The 4.3% figure exceeds the current CPI rate of 3.4%, meaning consumers expect prices to accelerate beyond their current pace, a perception that can become self-reinforcing if it changes purchasing behavior (such as pulling forward purchases to avoid expected price increases) or wage demands.
The July CPI report from the Bureau of Labor Statistics showed the Consumer Price Index for All Urban Consumers increasing 3.4% over the prior 12 months. Airline fares led the category increases at 25.5% year-over-year, followed by recreation (2.6%), household furnishings and operations (2.2%), and medical care (1.7%). The core PCE price index, the Federal Reserve’s preferred inflation measure, held at 3.7% year-over-year in July, remaining well above the Fed’s 2% target.
What the Data Means for Businesses and Investors
For retailers and consumer-facing businesses, the Deloitte data provides a mixed but actionable signal. The simultaneous rise in both essential and discretionary spending intentions suggests that the holiday planning season, which begins in earnest in September, is not starting from a position of consumer capitulation. Consumers are planning to spend. The question is whether the spending will be broad-based or concentrated in categories where costs are rising regardless of preference.
Healthcare-adjacent businesses, including pharmacies, medical device companies, insurance carriers, and employer benefit platforms, stand to see continued revenue growth driven by the structural cost increases that are forcing consumers to allocate more of their budgets to medical expenses. The Deloitte data reinforces what KFF, Peterson, and Mercer have documented through separate channels: healthcare spending is rising because healthcare costs are rising, and consumers have limited ability to avoid the expense.
For discretionary retailers, restaurants, travel companies, and entertainment businesses, the picture is more conditional. Discretionary spending intentions are up, but they are rising from a base that was depressed through the spring. The simultaneous rise could reflect genuine confidence, or it could reflect optimism that does not survive contact with the actual budget decisions consumers will make in September and October. The University of Michigan’s August sentiment decline and the rising inflation expectations add a cautionary note: consumers say they plan to spend more, but they also say they feel worse about the economy and expect prices to keep climbing.
For investors tracking consumer-sector equities, the Deloitte report supports a sector rotation thesis that has been building throughout 2026: overweight healthcare, underweight discretionary. The data does not change that thesis, but it does add a wrinkle by suggesting that discretionary may not be as weak as the headline sentiment numbers imply. The resolution will come from the actual spending data that arrives over the next 60 days, covering the back-to-school period and the early weeks of holiday-season purchasing.
The Broader Economic Context Heading Into Fall
The Deloitte report lands in an economic environment defined by crosscurrents. The labor market remains tight, with initial jobless claims falling to 203,000 for the week ending August 22, below consensus. Employers are not laying off workers in significant numbers. But wage growth has not kept pace with the specific cost categories that are driving consumer budget pressure, particularly healthcare, shelter, and insurance.
The Federal Reserve is watching the same data. The combination of sticky inflation (core PCE at 3.7%), low unemployment, and rising consumer spending intentions creates an environment where rate cuts remain unlikely at the September FOMC meeting. Fed Chair Kevin Warsh’s remarks at the upcoming Jackson Hole gathering will be the next signal on the trajectory of monetary policy. For consumers, the practical implication is that borrowing costs for mortgages, auto loans, credit cards, and business financing will remain elevated through at least the fall, adding another cost layer on top of the premium and out-of-pocket increases already in effect.
The Deloitte ConsumerSignals survey is conducted monthly and tracks consumer behavior, spending intentions, and financial sentiment across a nationally representative sample. The August 2026 report is available through Deloitte’s Consumer Industry Center interactive dashboard, which provides sector-level breakdowns for automotive, consumer products, food, retail, wholesale and distribution, airlines and hospitality, and transportation.
This content is for informational purposes only and does not constitute financial, investment, or tax advice. Readers should consult a qualified financial advisor before making investment decisions. Past performance is not indicative of future results.
FAQs
What Did the Deloitte August 2026 Consumer Report Find?
The report found that U.S. consumer spending intentions rose across both essential and discretionary categories in August after months of flat readings. Healthcare spending intentions posted the sharpest increase among essential categories. Financial well-being held steady for the third consecutive month.
Why Are Healthcare Spending Intentions Rising?
Healthcare costs have risen sharply in 2026 due to the expiration of enhanced ACA premium tax credits, a 9.7% increase in Medicare Part B premiums to $202.90 per month, employer-sponsored premium increases of 6.7-9%, and the growing cost of GLP-1 medications like Wegovy and Zepbound. Consumers are spending more on healthcare because costs are rising, not because they are choosing to consume more medical services.
Are Consumers Cutting Back on Discretionary Spending?
Not according to the Deloitte data. Discretionary spending intentions also rose in August alongside essential categories, which Deloitte interpreted as a signal of consumer resilience rather than a purely defensive spending posture. However, the University of Michigan’s August consumer sentiment index fell nearly 8%, suggesting confidence is eroding even as spending plans hold.
What Is the Current U.S. Inflation Rate?
The July 2026 CPI reading was 3.4% year-over-year. The core PCE price index, the Federal Reserve’s preferred measure, held at 3.7% year-over-year. Both figures remain above the Fed’s 2% target. The University of Michigan’s August survey showed consumer inflation expectations rising to 4.3%.
