Flat FED, Inflation Risks & Durability of Retail Sales

Consumers Are Still Spending,​
But Are Tariffs Starting to Shift Their Habits?​​

Retail Sales Remain Strong, But Slowed Down From Prior Month​

• May Inflation-adjusted headline retail sales are up 0.9% from a year ago, but they did drop 1.1% compared to last month​

• Front-running of tariffs boosted January-April figures, so May’s dip likely reflects payback rather than true weakness​

Tariff Impacts Are Beginning To Show Up In The Data​

• Building-supply, electronics and restaurant receipts have begun to soften ahead of higher input costs​

• Container rates from Asia to the West Coast rose 167% from early April through mid-June​

• As of mid-June, crude oil is up about 20% since June 1 to $75 per barrel; signals of inflation still to come​

Households Remain Resilient, Though Sentiment Lags Sales ​

• Unemployment holds at 4.2% and income growth is outpacing debt: total household debt to income ratio at 60.9%​

• Consumer savings including money market funds are up 3.6% year-over-year, giving consumers spending power, but historically low sentiment could temper outlays in H2 2025​

​Sources: Marcus & Millichap Research Services, U.S. Census Bureau​

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