The U.S. consumer: resilient, unvanquished, indefatigable.<\/p>\n
The May retail sales report<\/a> released on Wednesday from the U.S. Department of Commerce<\/a> says as much. Overall sales were up 0.9% from April, way more than economists expected.<\/p>\n Of course, some of that was soaring gas prices. Consumers spent 3.4% more at gas stations in May than they did in April and 26% more than they did in May 2025 (that\u2019s thanks to the war in Iran<\/a>).<\/p>\n But spending was also up at stores that sell clothes, health, and personal care products, as well as hobby shops<\/a> and the like.<\/p>\n So, in the face of rising prices, high interest rates, and economic and geopolitical uncertainty, how are consumers finding the capacity to keep spending in such a resilient, unvanquished, and indefatigable manner? <\/p>\n The May retail rebound was more than a pleasant surprise for Kathy Bostjancic, senior vice president and chief economist at Nationwide. <\/p>\n \u201cIt was strong and broad-based,\u201d Bostjancic said. \u201cConsumers continued to spend quite freely despite higher gasoline prices.\u201d<\/p>\n Keep in mind that retail sales are not adjusted for inflation, so they go up when people buy more and also when prices rise. But Thomas Ryan, an economist at Capital Economics, said inflation was not the only cause of the May increase.<\/p>\n \u201cThis wasn\u2019t just a case of people being forced to spend more on gasoline,\u201d he said. \u201cThere was also strength everywhere you look. Motor vehicles were up, furniture sales [were up].\u201d<\/p>\n More on retail<\/p>\n Ryan said we\u2019ve seen this pattern repeat over decades.<\/p>\n \u201cWhen the American consumer is faced with a hit to their real incomes, they tend to absorb that hit, lower their saving rate, and maintain spending levels, rather than cut back on discretionary spending,\u201d he said.<\/p>\n