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Retailers are expressing optimism about the resilience of U.S. consumers, a sentiment that could soon be put to the test as tariff-fueled price hikes increasingly show up on shelves.

“The top-down macro evidence seems clear: Americans are mostly paying for the tariffs,” George Saravelos, global head of FX research at Deutsche Bank.

Median expectations for inflation three years from now rose to 3.2% in April, the highest reading since July 2022. Estimates for year-ahead price growth, however, held steady.

While prices will rise for everyone, lower-income families are expected to lose a larger portion of their budgets because they tend to spend more of their earnings on goods.

Expected inflation five years ahead rose to 3% last month, the highest since May 2024, according to results of the New York Fed’s Survey of Consumer Expectations published Feb. 10.

Despite uncertainty around a presidential election, elevated interest rates and a cooling labor market, economic growth remained solid in 2024.

The so-called core personal consumption expenditures price index, which excludes food and energy items, increased 0.1% from October and 2.8% from a year earlier.

The final December sentiment index increased to 74 from 71.8 last month, according to the University of Michigan. The median estimate in a Bloomberg survey called for a reading of 74.2.

Learn what OTIF means, why it matters in logistics, and how it reflects delivery performance in this quick, insightful video.

U.S. auto sales softened at the end of last year as higher financing costs and near-record prices took their toll on would-be buyers.