NOTE FROM THE EDITOR

The “K-shaped economy” — where the rich get richer and the poor get poorer — has been a useful concept to explain the vagaries of consumer behavior in the U.S.

But Heather Long, who is now chief economist at Navy Federal Credit Union, tells me she has recently refined that to an “E-shaped economy” — where the rich feel comfortable spending, the middle class feel squeezed and lower-income households feel very shaky. This isn’t iron clad — we’ve also learned that many wealthier consumers are maxed out, while some lower-wage earners, living within their means, breathe easier.

And there are ups and downs. Last month U.S. consumers got a break from high fuel prices, which helped cool inflation, which in turn helped drive discretionary retail sales up well over 10% compared to last year. This week’s Closeout features a couple of entries that owe a debt to Long’s analysis of the recent inflation and retail sales reports, including her outlook for the year. Read the column here.

We will continue to check in with Long and other experts to bring retail industry leaders the information and analysis they need to navigate a volatile market. Thanks, as always, for reading, and have a great weekend!