Why it's a great time to be an American consumer

After peaking in late January, Gallup's U.S. Economic Confidence Index has been sliding lower, likely because of the bounceback in gasoline prices. But other data suggest American consumers are feeling pretty good, leading them to open their wallets.

One reason for the improving sentiment: The jobs are rolling in. On Tuesday, the government's JOLTS survey showed job openings surged to an all-time record high in April of 5.376 million. The result easily beat expectations and reinforces the expectation that the labor market is tightening quickly enough to lift wages later this year.

Wealth is also on the rise. Thursday's release of the Financial Accounts of the United States shows that household net worth increased $1.6 trillion to $84.9 trillion in the first quarter, reaching a new record high. As a share of disposable income, total net worth rose to 639 percent, a new best for the current business cycle and matching the highs of the last two economic expansions, as shown in the chart below.

Gains have been driven by the rising value of corporate equities and real estate assets. A recent increase in the savings rate -- as consumers largely pocketed the windfall from the drop in energy prices from last summer's highs -- has contributed as well.

As a result, retail spending is on the rise after a slowdown at the beginning of the year. Sales jumped 1.2 percent over April led by a strong rise in auto sales. Deutsche Bank economists note that core sales excluding autos, building materials and gasoline is rising at its fastest pace since the second quarter of 2014.

The team at Capital Economics believe the spending surge has been so strong that first-quarter growth in the nation's gross domestic product -- which shrank -0.7 percent -- will eventually be revised upward to flat, while second-quarter growth is tracking at a solid 2.5 percent to 3 percent.