Retail sales year to date are only up 0.3%. Consumer spending is slowing.

Consumer behavior has become more evident, with many opting for cheaper alternatives, like substituting steak with chicken.

To put this in perspective, the first five months of 2019 saw a 4% increase, while last year recorded a 2.7% rise.

In May, retail sales edged up by 0.1%, below the 0.2% estimate. Last month’s figure was revised down from -0.3% to -0.5%. Core retail sales, which contribute to GDP, increased by 0.4% but fell short of the 0.5% estimate.

For us, this means more data for the Fed to consider potentially earlier and more frequent rate cuts this year.

The job market shows significant revisions:

• October: revised from 165,000 to -9,000
• November: revised from 182,000 to 8,333
• December: revised from 290,000 to 116,333

The truth eventually surfaces.

Despite weaker retail sales, industrial production in May rose by 0.9%, surpassing the 0.3% estimate. This tempered the bond market’s reaction to the retail sales report.

There was some rate improvement, but not as much as anticipated.