Consumers are still spending, but cracks are starting to show

MoneyWatch Consumers are still spending, but cracks are starting to show .chip { background-image: url('/fly/bundles/cbsnewscore/images/chip-bgd/chip-bgd-moneywatch.jpg'); } By Aimee Picchi Aimee Picchi Associate Managing Editor, MoneyWatch Aimee Picchi is the associate managing editor for CBS MoneyWatch, where she covers business and personal finance. She previously worked at Bloomberg News and has written for national news outlets including USA Today and Consumer Reports. Read Full Bio Aimee Picchi May 21, 2026 / 3:48 PM EDT / CBS News Add CBS News on Google Consumer polls about the state of the U.S. economy suggest the mood is grim: Two-thirds of respondents to a recent CBS News poll reported feeling financially stressed, while a majority said soaring gasoline prices are causing hardship.For now, however, such sentiments have yet to quash consumer spending, the critical flow of dollars that keeps the economy humming. What gives?Walmart's latest financial results illustrate the pattern, with the world's largest retailer on Thursday reporting another quarter of strong sales growth. The company's low prices are drawing shoppers across the income spectrum who are spending more on essentials, particularly gas. Other retailers have also recently reported strong results, including Home Depot, Target and TJ Maxx owner TJX.Retail sales nationwide slowed in April from the previous month but remained healthy, showing resilience despite the surge in prices at the pump driven by the Iran war. But higher gas prices are adding up: The typical U.S. household is paying an additional $188 in fuel costs since the start of the war in late February, according to an estimate by Brown University researchers. Inflation, meanwhile, reached 3.8% in April, its highest level in almost three years.The disconnect between gloomy consumers and resilient spending matters because consumer spending drives about two-thirds of U.S. economic activity. For now, spending is holding up mostly...