Retail Sales Surprise to the Upside: What You Need to Know

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The big macro can cause big moves in the market. What does today's headline macro news mean for your portfolio?

What's happening: U.S. retail sales rose 1.1% in September, easily topping analysts' expectation of a 0.7% gain. Excluding autos, sales were up 0.6%, which was better than the 0.3% that was anticipated.

In plain English, please: As we've heard to exhaustion, our economy is largely a consumer-based economy. While we don't want to discount the importance of business spending and investment, when consumers get dour and stop opening their wallets, it can have a big impact on economic growth. Though one month's data isn't enough to assume that consumers are suddenly happy-go-lucky, the stronger-than-expected growth is certainly a good sign.

Stocks to watch: Stronger consumer spending is a particularly good sign for businesses that cater to consumers. This could be a really good thing if it's a sign of what's to come for the Christmas season. Bloomberg highlighted today that both Macy's (NYS: M) and Kohl's (NYS: KSS) have boosted hiring plans for the holiday season above last year's levels. If consumer spending continues to show life though, it could be good for everyone from Amazon.com (NAS: AMZN) to Procter & Gamble (NYS: PG) and Apple (NAS: AAPL) .

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At the time this article was published The Motley Fool owns shares of Apple. Motley Fool newsletter services have recommended buying shares of Procter & Gamble, Amazon.com, and Apple and creating a bull call spread position in Apple. Try any of our Foolish newsletter services free for 30 days. We Fools don't all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors.Fool contributorMatt Koppenhefferhas no financial interest in any of the companies mentioned. You can check out what Matt is keeping an eye on by visiting hisCAPS portfolio, or you can follow Matt on Twitter,@KoppTheFool, or onFacebook. The Fool'sdisclosure policyprefers dividends over a sharp stick in the eye.

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