With the release of the latest retail sales numbers, the Federal Reserve and the financial markets were hoping for clarity on the state of the U.S. economy. Instead, the numbers raised more questions than they actually answered.

Retail sales consist of receipts from stores and merchants that sell durable and non-durable goods and services to consumers. Released by the U.S. Census Bureau each month, it’s a broad-based measure that includes traditional retail stores, food and beverages, clothing, autos and gasoline, among others. Data incorporates all in-store, catalog and internet sales.

Retail sales represent almost half of all consumer spending, and is a cornerstone of a robust and vibrant economy. In fact, American consumer spending is the primary driver of the economy, accounting for over two-thirds of all U.S. economic activity.

The latest retail sales data reported a 0.3 percent decline in May from the prior month. It was the largest monthly decline since January 2016 and well below the market’s expectations of a 0.1 percent increase. The year-over-year increase for May was 3.8 percent, but this simply reflects the gains from a very anemic American economy in the first half of 2016. The Fed and the financial markets were hoping the sales data would build off the 0.4 percent monthly growth rate reported for April. Though April’s numbers were slightly below expectations, they did reflect a significant rebound from the underwhelming retail sales numbers reported in the first three months of the year.

The disappointing retail sales data certainly broadens the bigger picture of lackluster economic growth and tepid inflation. But the U.S. economy is a highly resilient entity that can absorb more than its share of punishment. However, as the economy faces more and more obstacles, the amount of breathing room it has to overcome these events gets tighter and tighter. Nonetheless, the Fed maintains the short-term economic outlook is strong enough to support its interest rate agenda.

Much can happen in the upcoming weeks and months to show acceleration in economic growth. But this increasingly raises a concern the Fed wishes to avoid — losing credibility.

The Fed continues to…