The bare necessities

U.S. consumers are doing better, despite signs that economic growth and the stock market are getting weaker. Sure, U.S. employers added a disappointingly ho-hum 151,000 jobs in January. But dig into the details of last Friday’s jobs report and a more upbeat story emerges for consumers.

Annual wage growth has quickened after being stuck near a poky 2 percent in recent years. Over the past 12 months, average hourly earnings climbed 2.5 percent over the past year to $25.39.

Those higher incomes translated into more jobs last month at retailers (up 57,700) and restaurants (46,700).

Still, stocks tell a slightly fuller story about consumers staying disciplined: they’re buying what they need, instead of what they want. The Standard & Poor’s 500 stock index of consumer discretionary stocks – including Walt Disney and Starbucks – has slumped from a year ago. Not so for the S&P 500 index of consumer staples, which include companies that make the items generally found on grocery store shelves. That index has stayed nearly flat, as companies such as Estee Lauder and Clorox have posted double digit gains.

The stock market shows that consumers are buying food, make-up and basic necessities. But their interest in discretionary items – lattes and movies – has fallen hard after rising for much of 2015.