This month brings more evidence that American consumers are doing better than ever. The Commerce Department announced last week that retail sales, a widespread proxy of consumer health, rose by 6.4 percent year over year in July, shattering Wall Street analyst expectations. The growth was driven by increased spending on Main Street, including at shops, restaurants, and grocery stores. This strong consumer demand led to increased manufacturing output as well. The Federal Reserve revealed last week that factory output in the United States was up by 2.8 percent.
Second quarter earnings reports at many major American retailers also crushed expectations. Walmart announced last week that same store sales grew by 4.5 percent, double analyst forecasts, and the fastest pace in more than 10 years. Such sales growth is especially impressive given the enormous size of these retailers. “Customers tell us that they feel better about the current health of the U.S. economy as well as their personal finances,” said Walmart chief executive officer Doug McMillon.