Are consumers breaking under the weight of high prices? We’re about to find out.

Four of America’s largest retailers will report quarterly results this week, and the most pressing question the reports will answer is whether Americans are finally starting to buckle under the weight of rising prices.

The results from Home Depot, Lowe’s, Walmart and Target should offer one of the clearest snapshots yet of how U.S. households are faring in an economy increasingly strained by soaring gasoline prices. persistent inflation and high borrowing costs.

The stakes are particularly high as rising energy prices continue to ripple throughout the economy, driving up transportation, grocery and household costs. while many consumers are already exhausted.

Economists, investors and journalists will analyze financial results and comments from business leaders for explicit signs of tension: Are buyers switching to cheaper products? Delaying home improvement projects? Or forgo discretionary purchases to prioritize essentials?

Home Depot kicks off the closely watched earnings parade at 9 a.m. ET Tuesday. The executives’ comments are expected to provide an early insight into consumer confidence and the housing market, in which average mortgage rates nationwide were 6.68% Monday for a 30-year fixed loan. according to Mortgage News Daily.

So far this spring, early spending data suggests consumers are still holding up well – but unevenly.

According to a recent report from the Bank of America Institute, total spending per household on credit and debit cards increased 4.8% in April compared to last year, the largest monthly increase in three years.

But behind resilience, economists say, lies an even wider gap.

The so-called K-shaped economy — in which spending by wealthier households accounts for an outsized share of overall consumer spending while lower-income families struggle — has widened in recent months, economists say.

The report finds that low- and middle-income consumers are increasingly turning away from discretionary spending categories like dining and entertainment, while wealthier households – boosted by strong stock market gains and rising home equity – continue to spend at a healthy pace.

And with inflation at 3.8% in April, higher than the 3.6% wage growth rate that month, economists warn that financial pressure on low-income households could intensify.

And if the gap continues to widen, it could make it more difficult for the Federal Reserve under new Fed Chairman Kevin Warsh, who is expected to be sworn in as next central bank chief Friday.

Warsh, who has already said he is open to “change of diet” at the Fed, will take on the top job as persistent inflation could force the central bank to keep interest rates higher than anyone could have imagined just months ago – to prevent the economy from overheating.

The Fed’s rising benchmark interest rates have a direct impact on consumer lending costs, meaning the same high borrowing costs would continue to keep pressure on businesses and consumers already struggling to keep up with rising costs.

“While households still have some short-term reserves – including tax refunds and savings – these are also unevenly distributed, highlighting the growing gap between overall resilience and the stress experienced by some households,” Bank of America economists said.