Cooling on the Surface, Steady at the Core: Retail Sales Tell a Mixed Tale

June 24, 2025 — Retail sales may have stumbled in May, but don’t count the consumer out just yet. While the headline number showed the biggest drop in nearly two years, the core “control group” — which strips out volatile categories like autos and gas — actually posted its strongest gain since January. That suggests consumers aren’t retreating, just getting more selective. E-commerce and general merchandise are still going strong, and the data aligns with a still-growing economy. Despite softer top-line numbers, the Fed’s stance and GDP trackers point to steady momentum — not a stall.