Today, we learned that U.S. retail sales were stronger in February than expected, jumping 1.1 percent.
Much of of the gain was driven by higher gas prices. But even adjusted autos and gas,
This was great news because February was the first full month that the American consumer got hit by the new payroll tax hike. Furthermore, it was encouraging to see spending grow in spite of higher gas prices.
And this doesn't look like a one-time thing.
TD Securities economist Millan Mulraine believes this spending momentum could continue for months:
On the whole, the report underscores our prevailing bias for the improving private sector fundamentals (resulting from rising household wealth due to higher home and equity prices) to continue to provide an important buffer for the ongoing hit to personal disposable income from higher taxes and weak income growth. And while spending is unlikely to improve meaningfully unless income growth accelerates, there is sufficient room (in savings and wealth) for the current modest positive momentum in spending to be sustained in the coming months.
With the stock market inching toward all-time highs, consumers exposed to the stock market are certainly feeling richer these days.