Say what you want about consumer sentiment and the true state of the economy. Just don't say consumers aren't (still) doing their part to keep it propped up. Last month's retail spending was once again healthy across the board, extending a multi-year streak of decent -- and sometimes quite firm -- year-over-year growth.
Per Friday morning's report from the Census Bureau, retail sales not counting food service but including auto sales were up 4.2%. With food service, spending was up 4.1% year-over-year. Counting food but not counting cars, consumer spending was up 4.0%. Spending at gas stations was up 11.3%, on the heels of higher gas prices.
The last of those stratifications -- gas stations -- would suggest that it's just higher gasoline prices driving stronger retail sales overall. That's not the case though. Money spent at filling stations, which is more than just gas, only counts for about 8% of all retail spending (including cars and including food service), which isn't enough to skew the broad numbers.
It should also be made clear that last month's post-hurricane car-buying frenzy didn't prod the broad numbers higher either. Again, when taking automobile sales out of the equation altogether, we still saw 4.0% growth in consumer spending. The graphic below tells the tale.
It matters, simply because consumer-spending drives about 2/3 of the U.S. economy; only the other 1/3 comes from corporate-level expenditures. In other words, this is to say that the economy should be growing. And it is. The second quarter's GDP growth rate was an impressive 3.1%, which was the best pace in more than two years. That strong spending pace is also a sign that consumers are confident enough in the future to spend willingly now, perhaps in some ways creating the very economic strength they foresee.
Whatever the case, the data bodes well for market earnings as a whole, and for consumer-oriented companies in particular... even some (though certainly not all) retailers.