Four of America\u2019s largest retailers will report their quarterly earnings this week, and the most pressing question the reports will answer is whether Americans are finally starting to buckle under the weight of rising prices.<\/p>\n
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The results from Home Depot, Lowe\u2019s, Walmart and Target are expected to offer one of the clearest snapshots yet of how U.S. households are navigating an economy increasingly under strain from soaring gas prices, stubborn inflation <\/a>and elevated borrowing costs.<\/p>\n The stakes are especially high as rising energy prices continue to ripple through the broader economy, driving up transportation, grocery and household costs when many consumers are already stretched thin<\/a>.<\/p>\n Economists, investors and journalists will parse the financial results and the accompanying commentary from corporate leaders looking for explicit signs of strain: Are shoppers trading down to cheaper products? Delaying home improvement projects? Or pulling back on discretionary purchases to prioritize essentials? <\/p>\n FORSUBSCRIBERS<\/p>\n 01:24<\/p>\n Home Depot kicked off the closely watched earnings parade Tuesday morning, reporting a 5% increase in sales from a year earlier. The company\u2019s chief financial officer told CNBC<\/a> that homeowners are \u201cmore protected financially\u201d than other customers, but noted that they\u2019re still holding off on more expensive projects. Affordability is a big challenge in the housing market, where average mortgage rates nationwide Monday were 6.68% for a 30-year fixed loan, according to Mortgage News Daily<\/a>.<\/p>\n The Home Depot results echo early spring spending data that suggests consumers are still holding up all right \u2014 but not evenly.<\/p>\n According to a recent report from the Bank of America Institute, total credit and debit card spending per household rose 4.8% in April from a year ago, the strongest single-month increase in three years. <\/p>\n But beneath the headline resilience, economists say, an even sharper divide is emerging.<\/p>\n The so-called K-shaped economy \u2014 in which spending by wealthier households accounts for an outsized share of overall consumer spending while lower-income families struggle \u2014 has widened in recent months, according to economists.<\/p>\n The report found lower- and middle-income consumers were increasingly pulling back on discretionary spending categories like dining and entertainment, while wealthier households \u2014 boosted by strong stock market gains and rising home equity values \u2014 continue to spend at a healthy pace.<\/p>\n And with inflation running at 3.8% in April, above the wage growth rate of 3.6% that month, economists warn that financial pressure on lower-income households could intensify.<\/p>\n And if the gap continues to widen, it could complicate the Federal Reserve\u2019s path under incoming Fed Chair Kevin Warsh, who is expected to be sworn in as the central bank\u2019s next chief<\/a> Friday. <\/p>\n![\"\"\/](\"https:\/\/media-cldnry.s-nbcnews.com\/image\/upload\/rockcms\/2026-01\/asterisk-43f04b.svg\")
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What\u2019s behind America\u2019s new inflation spike<\/p>\n