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Economics

US Consumers Power On, Though Borrowing Pickup Highlights Risk

  • Retail sales, bellwether earnings reports show strong consumer
  • Credit card use, Walmart details suggest future softening
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Retail Sales Rise in April Despite Record Inflation

US economic data and earnings from two retail bellwethers indicated American consumers are spending with plenty of gusto, though cracks in the foundation of the economy are starting to form.

Recent gains in overall retail sales, combined with solid earnings reports from retailers, foreshadow strong second-quarter consumption and suggest consumers aren’t yet deterred by higher inflation. But the spending binge -- fueled more recently by increased credit card use -- might not last.