Home Depot sees steady demand as U.S. spending holds in May

U.S. households kept spending in May even as inflation stayed stubborn, a mix that points to shoppers staying active but more careful with every trip through Home Depot’s aisles. The Bureau of Economic Analysis said personal income rose $181.6 billion, or 0.7 percent, and personal consumption expenditures also climbed 0.7 percent, while the PCE price index increased 0.4 percent for the month and 4.1 percent from a year earlier.

The details inside the BEA report fit the kind of store-level behavior associates already recognize. Disposable personal income rose $164.9 billion, personal saving was $704.2 billion, and the saving rate held at 3.0 percent. Real PCE rose 0.3 percent, which suggests demand was still there even as customers felt pressure from prices. Services spending increased $94.3 billion and goods spending rose $61.8 billion, a split that matters for a retailer like Home Depot, where baskets can swing between a single repair part, seasonal consumables, and a bigger renovation order.

For associates at the register and the Pro desk, that usually means shoppers are still buying, but they are comparing more carefully, breaking projects into smaller trips, and leaning harder toward repair and maintenance rather than major discretionary remodels. The same household may still need mulch, paint, fasteners, and a replacement part, but delay the kitchen overhaul or bath refresh that would have filled a cart a year ago. Reuters said the May inflation reading was the first above 4.0 percent since April 2023, underscoring why price sensitivity is still part of the job.

Home Depot’s own first-quarter fiscal 2026 results show the company is already trading in that environment. The company posted sales of $41.8 billion, up 4.8 percent from a year earlier, while comparable sales rose 0.6 percent overall and 0.4 percent in the U.S. Ted Decker said underlying demand was “relatively similar” to fiscal 2025 despite greater consumer uncertainty and housing affordability pressure, and the company reaffirmed full-year fiscal 2026 guidance for sales growth of about 2.5 percent to 4.5 percent and comparable sales growth of flat to 2.0 percent.

CNBC reported that finance chief Richard McPhail said Home Depot’s core homeowner shopper remained engaged but was deferring larger projects, a warning sign for ticket size even when traffic holds up. With 2,361 retail stores and more than 1,280 SRS locations at the end of the quarter, that pattern will show up across a footprint large enough for every shift to feel the difference between a steady repair customer and a postponed remodel.