As I reflect on the first seven months of 2026, I'm impressed -- though not necessarily surprised -- by the resilience of the U.S. economy.

Think about it for a moment. The U.S. economy has endured an unexpected war in Iran, the longest government shutdown on record, and volatile energy prices, just to name a few challenges. Yet despite those headwinds, consumers continue to spend, U.S. stock indices remain near all-time highs, and core inflation has fallen to its lowest year-over-year level since 2021. (1)

Let's take a closer look at each of these important trends.

U.S. retail sales rose more than 11% in June compared to a year ago, while online sales climbed nearly 20%, according to the U.S. Commerce Department. (2) If you're looking for one of the best indicators of the health of the U.S. economy, look no further than the American consumer.

With major U.S. stock indices at or near all-time highs, it's natural for some investors to wonder whether we're approaching a market bubble. While periodic pullbacks are a normal part of investing -- and simply the cost of doing business for long-term investors -- the current market continues to be supported by strong corporate profitability.

In fact, corporate profits as a percentage of GDP remain at their highest level since 1959. (3) Historically, strong corporate earnings have provided an important foundation for continued market growth.

Earlier this year, many economists predicted the Federal Reserve would raise interest rates in response to higher inflation driven by energy prices. However, June's inflation data may cause some economists to reconsider those forecasts. Headline CPI fell 0.4% month over month, bringing the annual rate down to 3.5%. (4)

In addition, Core CPI -- which excludes food and energy -- was flat in June and slowed to 2.6% year over year, its lowest level since March 2021. Those numbers don't appear to support additional short-term interest rate hikes by the Federal Reserve. (5)

The broader takeaway is this: the U.S. economy continues to demonstrate remarkable resilience. It has absorbed significant challenges while continuing to move forward. Don't get caught up in a single negative headline. Instead, take a step back and look at the bigger picture.

As we head into August, I'm looking forward to visiting Yellowstone National Park for the first time. A friend and I will spend four and a half days backpacking 55 miles through Yellowstone's Cascade Corner. There are so many incredible places to explore throughout our country, and I encourage everyone to get outdoors and experience America's remarkable landscapes. And if you do, don't forget to pack some bear spray!

Have a wonderful August, and I look forward to seeing you again next month.

(1) - https://www.dlacalle.com/en/another-fed-rate-hike-would-be-a-serious-mistake/

(2) - https://www.retaildive.com/news/monthly-retail-sales-from-the-us-commerce-department/574252/

(3) - https://fred.stlouisfed.org/series/CP

(4) - https://www.dlacalle.com/en/another-fed-rate-hike-would-be-a-serious-mistake/

(5) - https://www.dlacalle.com/en/another-fed-rate-hike-would-be-a-serious-mistake/