State of Business: The Free-Spending Consumer

STATE OF BUSINESS

As an economist once put it, a citizen casts a vote every time he makes a purchase. By that standard, the American consumer is trooping to the polls in record numbers—and voting his confidence in the U.S. economy. The Commerce Department reported last week that retail sales in July rose 1% over June's alltime high to set a new record of $20.7 billion.

The rise was not spectacular, but economists took pleasure in it nonetheless. During the year's first five months retail sales had hovered around the $20.3 billion-a-month mark, a remarkably steady performance but still not good enough for...