Retail sales surged toward the end of summer. The U.S. economy has plenty of momentum.

Retail sales in the United States rose sharply in August, registering the largest increase in five months. The gain adds to a run of recent data suggesting economic activity picked up toward the end of summer, as households continued to spend despite elevated borrowing costs and lingering price pressures.

For markets, the reading matters because consumer spending is the backbone of U.S. economic growth. A stronger-than-expected sales figure can support expectations that the expansion remains intact, while also shaping the debate over how long the Federal Reserve keeps interest rates restrictive. In bond markets, resilient data can push yields higher; for equities, it can be read either as a sign of durable demand or as a reason for policy to stay tight for longer.

What to watch next: whether the August strength carries into September, how upcoming inflation and employment reports compare, and whether retailers flag any shift in consumer behavior as the holiday season approaches. One month does not make a trend, but it is a meaningful data point.