American households are still opening their wallets, but cracks are beginning to show in the foundation supporting robust consumer spending.
Fresh economic data released Wednesday painted a picture of underlying resilience: retail sales climbed 0.6% in February after stumbling in January, while core sales that feed into GDP calculations rose 0.5%. Consumers splurged on discretionary items, with strong sales at auto dealers, sporting goods retailers, and apparel stores.
The employment picture remained solid as well. Private payrolls grew by 62,000 in March, marking the second consecutive month of meaningful job creation, according to payroll processor ADP. Manufacturing activity also expanded for the third straight month, with the Institute for Supply Management's activity index rising to 52.7.
Yet the most telling indicator may be wages. Pay growth continues to strengthen despite relatively modest hiring numbers overall, signaling persistent tightness in the labor market. ADP chief economist Nela Richardson told reporters that while job creation has been
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