The weekly data for same-store retail sales have increased over the past two months, see chart below. The sources of strong consumer spending are significant household savings, robust job creation, solid wage growth, and the rebound in the stock market since mid-June. The continued strength of US consumer spending is quite worrying for the FOMC, given they are trying to cool the economy down.
Ultimately consumer spending will slow down because that is what the Fed wants. The question is just how long it will take before we begin to see it in the data.
The bottom line is that the Fed may have to increase interest rates more than the market currently is pricing in to slow down growth and inflation.