With several retailers set to report their quarterly earnings this week, Yahoo Finance's Brad Smith gives an overview of the current state of the consumer.

Consumer confidence rose in May after three consecutive months of declines. However, inflation remains above the Federal Reserve's 2% interest rate target, and shelter and energy costs remain high.

This week's retail earnings will provide a better picture of the state of consumer spending, and what areas shoppers are willing to spend a little more.

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This post was written by Melanie Riehl