ETFs tracking the consumer staples and discretionary sectors are outperforming the S&P 500 so far this year with consumption showing a close relationship with increases in wages.
Consumer Discretionary Select Sector SPDR (NYSEArca: XLY) and Consumer Staples Select Sector SPDR (NYSEArca: XLP) are up 25.7% and 20%, respectively, according to Morningstar. The S&P 500 has gained about 19% year to date. [Consumer ETFs: Staples vs. Discretionary]
In particular, consumer discretionary and retail ETFs have been strong performers since the stock market bottomed in March 2009. [Consumer Discretionary ETFs Still Crushing the S&P 500]
Consumer ETFs have done well even though Americans are deleveraging and hesitant to spend on credit. [Lackluster Retail Sales May Cool Sector ETFs]
“Consumers in the U.S. are spending more closely in line with their incomes than in any expansion in the past 48 years, learning the lesson of the last recession that living beyond your means often ends badly,” Bloomberg reports.