Chart of the Week

Getting real in retail

June 22, 2026

Time to Read: 3 mins

Despite persistent concerns that sticky inflation would erode purchasing power and drag consumer spending lower, the May retail sales data tells a different story. Spending is up not just in dollar terms, but in quantity, highlighting continued consumer resilience.

Enlarge

Nominal retail sales rose 6.9% year-over-year in May, the strongest growth rate in several years and more than double the average pace recorded since 2023. Importantly, this was not simply a reflection of higher prices. Real, inflation-adjusted retail sales grew 2.6% year-over-year — roughly 2% above the average — confirming that consumers are buying more, not just paying more.

However, U.S. consumer spending has not been uniform. The K-shaped dynamic (where higher-income households continue to spend while lower-income consumers face more meaningful pressure) is real and ongoing. While pockets of stress exist, total spending has held up and increased.

That said, the picture is not without risk. Higher inflation could weaken the spending momentum and lead to slower economic growth. For now, the increase in total consumer buying activity supports our constructive forward outlook and justifies remaining invested.

Chart of the Week | Macroeconomic

Play the long game

When it comes to investing, time matters. While headlines and short-term perspectives can lead investors to try and time the market, investors have historically been rewarded by playing the long game. Rather than overreacting to market noise, investing over longer time periods can help smooth the ride without sacrificing returns. The lesson: stay diversified and invested for the long term.

Chart of the Week | Macroeconomic

Contained contagion?

U.S. high yield credit spreads have widened year to date, reflecting greater investor caution about perceived default risk. The move also raises concerns about possible credit contagion. However, because spread widening has been concentrated in the lowest-quality issuers rather than higher-quality issuers, we don’t anticipate broader market stress.

Chart of the Week | Macroeconomic

Can the bull run in corporate margins continue?

Higher inflation and elevated interest rates typically weigh on corporate profitability, yet corporate margins continue to climb to record highs. While that strength is evident both in the U.S. and abroad, U.S. outperformance versus Europe is now the widest on record. Stronger margins have helped contribute to better-than-expected earnings and reinforce U.S. equity leadership. The question now is whether that strength can persist?

Chart of the Week | Macroeconomic

Higher yields, but lower sensitivity

Higher interest rates have become a frequently cited risk to corporate earnings and the economy. The conventional thinking is straightforward: when borrowing costs rise, companies face higher interest expenses, profits come under pressure, and economic growth slows. While there is truth to that relationship, the current cycle may differ from investors’ expectations.