Retail sales surged toward the end of summer. Economy still has plenty of momentum.

Retail sales rose sharply in August, marking the largest gain in five months, according to the latest data. The result suggests consumers continued to spend at a solid pace as summer drew to a close, adding to a run of reports pointing to an economy with more momentum than many analysts had anticipated.

For markets, the retail sales figures matter because consumer spending is the largest single driver of U.S. economic growth. A stronger-than-expected reading can shift expectations around the path of interest rates, corporate earnings and overall growth, which in turn can influence how investors price stocks and bonds. It can also cut both ways: resilient demand supports earnings, but it may complicate the outlook for those hoping for a quicker slowdown in inflation.

What to watch from here is whether the August strength carries into the autumn months, or whether it reflects a one-off boost. Upcoming inflation, employment and consumer-confidence data will help clarify whether spending is being driven by solid incomes or by households drawing down savings.