The Commerce Department gave us August’s Retail Sales data early this morning, reporting a 0.4% increase in consumer spending. That was stronger than the 0.2% that expected. Because consumer spending makes up almost 70% of the U.S. economy, the stronger reading makes the data bad news for bonds and mortgage rates. The size of the reaction in bonds is somewhat surprising since a secondary reading that excludes more volatile auto transactions came in lower than expected. Still, this is considered to be a major piece of economic data, so the headline number is apparently driving trading.