Monday Macro with Dave
Weekly perspective on current developments, emerging risks, and potential implications for investors.
Tax refunds rise 11%, providing important tailwind to consumers
Dave Harrison Smith, CFA
Chief Investment Officer
April 27, 2026
Tax refunds provide a timely cushion
Tax Day is behind us, and the latest data from the IRS gives us a new read on a source of economic support: tax refunds. This year, the increase in average refund size is meaningful and provides a temporary tailwind for consumers. The average refund in 2026 rose to $3,275, a strong increase of 11.3% over last year. Total refunds rose to $296.1 billion, up $43.0 billion over last year.
Average refund per tax filing
These refunds have come at a critical time for the consumer. Gasoline prices remain elevated with national averages above $4.00, up nearly a full dollar from a year ago. This has acted as an additional tax on American consumers. To date, high-frequency spending data has been relatively resilient, suggesting consumers have absorbed the energy shock. Refunds have clearly played a role. The risk remains that, as the benefit of tax refunds wanes, consumers may feel more of the pinch and pull back their spending in unanticipated ways.
Capital spending remains a source of strength
Consumer spending has been a steady pillar of U.S. economic strength in recent years. The other, undoubtedly, has been corporate investment. Data from the U.S. Census Bureau Durable Goods report highlights the trend. Growth in Non-Defense New Orders, often seen as a proxy for corporate capital expenditures, has continued to post strong monthly and annual growth in 2026, building on a trend that began to accelerate in 2024.
Non-defense new orders, core capital goods
Much of this boom can be attributed to robust investment in artificial intelligence, including data centers and equipment. The key question is durability. Over the coming weeks, we expect to receive several earnings reports that will provide an important signal about the trajectory of AI capital spending. Expectations are elevated, but recent updates from major infrastructure providers have broadly reinforced confidence in the continued build-out.
Energy prices remain the key risk
Overall, the early read is one of continued resilience in the face of global volatility. U.S. consumer data continues to suggest stability, with the benefit of tax refunds helping offset the pain of the energy shock. The labor market is cool but looks to be stabilizing. This, combined with strong capital spending, has supported the U.S. stock market. The durability of the consumer and capital spending is critical to continued strength. Continued elevated energy prices remain a key risk, as higher prices filter through to inflation expectations and erode spending.
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