Despite record low consumer sentiment and declining real wages, BofA's omniscient analysts forecast a blockbuster beat for US Retail Sales for both headline, core, and control group cohorts.

And they were right with the headline retail sales rising 0.9% MoM in May (+0.6% MoM exp) driving YoY sales up a stunning 6.9% - the best since Jan 2023

Electronics and Food Services saw sales decline very modestly in May while Gasoline Stations, Nonstore Retailers, and Motor Vehicle & Parts Dealers saw the biggest rise...

Core (Ex-Autos and Ex-Autos and Gas) also strongly beat expectations (+0.8% MoM vs +0.6% MoM exp and +0.5% vs +0.3% MoM exp respectively.

Most notably, the 'Control Group' which feeds directly into the GDP caluclation rose 0.7% MoM (better than the 0.4% exp)...

Of course this is all nominal-based.

Interestingly, 'real' retail sales (admittedly crudely adjusted via CPI) continue to rebound from a negative print in December...

Spending does seem to continue improving despite the cataclysmic decline in confidence...

Nevertheless, back to where we started above and the disgruntled consumer. BofA notes that gas prices took another big leg up in May, rising by 7.0% m/m SA in the CPI report. As a result, the share of discretionary categories in the consumer wallet in May 2026 was lower than in May 2025 levels across all income cohorts.

This is noteworthy because this share has been trending up in recent years.

Lower-income HHs are feeling the pinch of the gas shock more: they’ve seen a larger increase in necessary spending, which has led to a widening of the “K” in discretionary outlays.

Will those alligator jaws begin to close now that gas prices are starting to tumble?