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Consumers Drive the Economy, Stock Market Higher

The American consumer appears to be in good shape heading into the final quarter of the year, which includes the busy holiday-shopping season. Investors will be watching Friday’s jobs report for further evidence the U.S. economy can keep humming into 2019.

Consumer confidence climbed to an 18-year high in September, supported by a strong labor market. Analysts will get their next snapshot of the U.S. consumer on Friday, when the Labor Department releases fresh data on unemployment, wages and jobs growth.

Consumer spending, which accounts for more than two-thirds of the U.S. economy, cooled in August, though economists still expect strong growth in the final stretch of the year. Consumer savings matched July’s pace.

Discretionary stocks are outperforming the broader U.S. stock market, signaling consumers are confident in the heath of the economy and willing to part with their disposable income.

Online retail giant Amazon.com has soared this year thanks to a boom in sales. But more traditional retailers selling goods ranging from sportswear to home accessories have also thrived.

Still, within the consumer discretionary sector, department stores and companies selling textiles, apparel and luxury goods have raced past retailers in the automobiles and household durables space.

Many investors are optimistic that the U.S. consumer will keep supporting economic growth. Yet some warn that if oil prices keep rising, it could dent spending further down the line.
Source: Dow Jones

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