Continuing a trend that has been in place since the financial crisis of 2008, the U.S. consumer remains cautious when it comes to borrowing and spending. Two data points reported last week for these metrics illustrate continued sluggishness. As reported by the New York Fed, household debt rose just 0.2% between January and March, the smallest increase since the second quarter of last year. Further, mortgage balances, which tend to have the largest impact on the broader economy, were unchanged quarter-over-quarter. The lack of borrowing explains in part the lack of spending. Retail sales during April were flat month-over-month, and have been averaging -0.1% over the last six months. Stripping out volatile components like automotive and gasoline purchases, sales were +0.2% month-over-month, which is consistent with the six-month moving average (see chart below). Many U.S. economic bulls (and bond bears) pointed to the potential for the consumer to drive growth this year since gas prices have dropped and employment has increased. Thus far, this prognostication hasn't come to fruition. The bond market rallied in response to this data, and until the consumer comes back, the chances are low that the U.S. economy breaks out of the moderate growth trend we've seen the last few years.