April 2026 Retail Sales +0.5% MoM, +4.9% YoY — Consumer Resilience; Empire State Manufacturing 19.6 — Highest Since Early 2022

Two positive economic data releases on May 15 provided some counterbalance to the summit disappointment: robust April retail sales and a strong Empire State Manufacturing reading. **April 2026 Retail Sales (US Census Bureau, released ~May 15):** - **Total retail and food services sales:** $757.1 billion — **+0.5% month-over-month** (March to April) - **Year-over-year:** +4.9% (from April 2025 to April 2026) — well above headline inflation, implying real consumer spending growth - **Retail trade sales (ex-food services):** +0.5% MoM; +5.2% YoY - **Nonstore retailers (e-commerce):** +11.1% YoY — online shopping continues to gain share - **Significance:** The April retail beat demonstrates that despite Michigan Consumer Sentiment at an all-time record low of 47.6 (April final), actual spending behavior has not collapsed — the sentiment/spending divergence remains a key macro puzzle **Empire State Manufacturing Survey — May 2026 (released May 15):** - **General Business Conditions index:** 19.6 — **+8.6 points** from April (prior reading: 11.0) - **Historical context:** The highest reading in over four years (best since early 2022) — the ninth consecutive positive reading (above zero = expansion) - **New orders:** Increased significantly — forward demand improving - **Shipments:** Rose sharply - **Input price pressures:** Picked up sharply — consistent with April PPI +6.0% pipeline signal - **Employment:** Positive signal **Macro significance:** The retail sales and Empire State data together support the 'resilient consumer + sticky inflation' stagflation thesis: - Consumer spending (real driver of ~70% of US GDP) is holding up despite the sentiment crash - Manufacturing in the New York district is expanding — not contracting as a pre-recession would require - BUT the sharp input price pressures in Empire State confirm the PPI signal: producer-level inflation is embedding and will sustain consumer price pressure through the summer **Recession probability implications:** The strong consumer data reduces the near-term recession probability. Goldman Sachs (~20%) and Polymarket (~22% implied recession probability) are validated by the consumption data. However, JPMorgan (~35%) focuses on the cumulative inflation trajectory — the retail sales beat does not solve the 3.8% CPI / 6.0% PPI dynamic that keeps hike risk elevated.