The resilient stock market may be keeping the economy out of a recession

Stock market growth that seems impervious to tariffs, politics and a moribund jobs picture is in turn powering consumer spending and putting a floor under an economy that many expected to be teetering on the brink of recession by now.

Economic data this week painted a surprisingly bright picture of recent trends.

Consumer spending in August was stronger than expected and so was income. Companies and households continue to order big-ticket items while inflation has been relatively soft. Even housing showed signs of life, with new sales hitting a three-year high in August.

Previously, such trends had been powered by trillions in stimulus from both congressional spending and low interest rates and liquidity injections from the Federal Reserve.

But the narrative now is shifting towards the ever-popular wealth effect coming from Wall Street and a succession of new highs in major stock indexes despite lofty valuations.