Job growth was uneven during the Second Quarter 2026, with a 115,000 gain in April, a 172,000 gain in May and a 57,000 gain in June, resulting in an unemployment rate of 4.2% in June. Hiring remains concentrated in a handful of sectors, including health care and social services.  Job weakness was most pronounced in leisure and hospitality, despite preparations for the World Cup. Job creation in other blue collar and white collar sectors was frozen. According to Guy Berger, senior fellow at the Burning Glass Institute, “The labor market is probably, slowly, heading in the right direction. But at this current pace, it's going to take a long time to unwind the moderate amount of damage from the last few years. And something could knock that off course.”

The U.S. Bureau of Labor Statistics released the May 2026 Consumer Price Index on June 10, with headline CPI rising 0.5% month over month and 4.2% year-over-year, the highest annual reading since April 2023 and up from 3.8% in April. Core CPI rose a more modest 0.2% in May, with annual core inflation ticking up to 2.9% from 2.8%, the highest since September 2025.

The U.S. Census Bureau released its advance estimate of retail and food services sales for June 2026 on July 16, showing total spending up 6.7% from a year earlier, driven mostly by gas price increases (5.4% excluding gasoline stations). Sales growth slowed on a month-over-month basis in June to 0.2%, according to the U.S. Commerce Department, as gas prices declined. Even though consumer spending has held up relatively well, nearly 60% of personal outlays are concentrated among the top 20% of earners. Generally, households have offset higher costs by drawing down savings, using more credit and benefitting from tax refunds.

The impact of higher borrowing costs and higher energy costs has impacted the Greater Washington, D.C. economy negatively, according to Ian Anderson, CBRE’s senior director of research and analysis, and his REVIVE Regional Vibrancy Index. Per Anderson, “Overall the region just continues to be in this ‘muddling through’ phase. It’s just like two steps forward, one step back, two steps forward, one step back, two steps backward, one step forward.” Anderson feels that the region’s job market, which took a big hit from federal cuts, is “starting to turn a corner,” with the total number of people employed in the region increasing by 0.2% in March and 0.1% in April.

Given the economic uncertainty, off-price retailers and thrift stores continued to experience increased traffic, as consumers sought value and treasure-hunt experiences. Per Cushman & Wakefield, value-oriented retail is best positioned for growth. According to The New York Times, retailers like Walmart, Target and Dollar General are among those investing in remodeling thousands of existing stores even as more shopping happens online.  At least $20 billion is budgeted to remodel over 12,000 stores this decade. Per Target’s Michael Fiddelke, the company’s CEO, “By investing in new stores and remodels, we’re elevating the Target experience.” Luxury brands also are committed to brick and mortar, as physical stores remain the dominant channel. According to Rachel Daydou, EY Studio+ France luxury, AI and sustainability leader, “The store is still the cornerstone and the preferred purchase channel and the one that delivers the best experience.” Daydou indicates that 44% of surveyed customers indicate that they choose in-store because of the “pampering experience.” Customers select spaces where they feel most recognized, guided and reassured.

Placer.ai notes that open-air shopping centers experienced a 4.7% year-over-year increase in traffic through June, the highest among retail formats. Audience analysis indicates that the gains are coming from an increasingly diverse customer base, which suggests that centers are broadening their appeal through co-tenancy, attracting more value-conscious shoppers. A combination of retail, dining, entertainment and one-stop convenience may help centers resonate with a broader audience in an environment where consumers remain selective about discretionary spending.

The expanding definition of value applies to the dining sector as well, where consumers seek quality, convenience and experience in addition to affordability. Year to date dining traffic saw a sustained decline, with the exception of the month of February, which saw a 3.7% increase in visits. Quick serve restaurants have suffered most of this decline, as rising menu prices and inflation have weakened the segment’s cost-based value proposition and grocery stores and superstores have stolen market share in addition to traditional restaurant rivals. Meanwhile, fine dining has posted traffic growth in nearly every month of 2026, with the exception of March and fast casual and casual dining also have proven resilient. In general, the strongest performers have found ways to deliver value through menu innovation, loyalty engagement, differentiated experiences, service and atmosphere.

Retail Net Absorption Bounces Back

After a slow first quarter, retail net absorption in the United States turned positive in Q2 2026, with 708,000 square feet.