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By Kristin Myers, Editor-in-Chief

What's Happening Today

Good morning! It's Kristin with your daily morning digest.

Retail sales rose by 0.9% in April, in a sign that consumer spending continues to go strong even as the rate of inflation sits close to 40-year highs, according to the Census Bureau's latest retail sales report released this morning. Though demand remained strong, sales grew at a slower rate than March's upwardly revised 1.4% gain.

Because consumer spending accounts for a large part of the U.S. economy, retail sales provide an important gauge of the strength of the American economy. But those figures might decline in the months ahead, as the Federal Reserve raises interest rates and prices stay high. Higher rates make mortgages, car loans, and credit cards more expensive, and sales are expected to wane as consumers cut back.

Stocks are on the rise following the release of the retail sales figures and earnings. Major retailers Walmart, Home Depot, and others reported their quarterly earnings today, and raised their outlooks for the rest of the year, indicating that they believe consumers will continue to spend, despite increasing costs. However, retailers continue to sound the alarm about inflation and its impact on corporate profits and costs.

Today investors will also pay close attention to remarks from Federal Reserve Chair Jerome Powell for any hints on future rate hikes as he speaks at a conference. Investors have been closely watching the Fed for guidance on inflation and how aggressive the central bank plans to be in fighting the increasing cost of goods and services.

Separately, the National Association of Home Builders (NAHB) reported its index of builder confidence plunged eight points to a reading of 69 this month, in the fifth straight month of declines, as double-digit percentage price increases for materials weigh on builder sentiment and rising rates impact buyer demand. "Based on current affordability conditions, less than 50% of new and existing home sales are affordable for a typical family," said NAHB Chief Economist Robert Dietz in a release. Yesterday the White House released an action plan to build more homes to ease housing costs by boosting America's housing supply.

- Kristin

Editors' Picks

Retail Sales Rise Again, Despite Higher Prices (The Balance)

Biden Administration Unveils Action Plan to Boost Affordable Housing (CNN)

Types of Home Loans for First-Time Homebuyers (The Balance)

What Higher Interest Rates Could Mean for Jobs (The New York Times)

In a Hot Job Market, Companies Hand Out Big Awards to Retain Key Executives (The Wall Street Journal)

Bank of America Clients Hoard Cash at Highest Level in Two Decades (Bloomberg)

Crypto Crash Grabs the Attention of Treasury, Other Regulators (The Washington Post)

What Are the Laws for Cryptocurrency? (The Balance)

Off the Charts

Just 8% of investors polled by Gallup said crypto was the best option for long-term investing according to a release earlier this month, underscoring the setbacks that digital currencies have faced recently. Real estate was the top choice, followed by stocks and mutual funds.

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