The stock market is volatile. And surveys show consumer confidence is weak.

But a new report Monday shows that is not dampening spending. In fact, the Department of Revenues reports Arizonans are opening up their wallets even wider.

Total retail sales last month his $3.55 billion. That’s an 8.5 percent increase over the same month a year earlier.

Economist Marshall Vest of the Eller School of Management at the University of Arizona had a one-word response to the numbers

“Surprising,” he said.

Vest said this does not appear to be an aberration.

He pointed out that the year-over-year sales for July were up 7.5 percent. And that follows relatively strong showings for the three prior months.

All that, however, is occurring against an economic backdrop that paints a different picture.

“Consumer confidence is really low on the part of both consumers and businesses at this point,” Vest said. “The outlook is downright bleak for the nation’s economy as well as the world’s economy.”

But economist Dennis Hoffman of the W.P. Carey School of Business at Arizona State University said just because Arizonans say they’re worried about the future does not necessarily translate into how they actually act. He said consumer confidence surveys can be “useful.”

“But sometimes, you don’t just listen to what they’ll tell you,” Hoffman explained. “You’ve got to watch what they do.”

And he said the numbers show that, once the economy started to recover, Arizonans are apparently feeling good enough to keep spending despite the bouts of bad news.

Much of what they are buying involves durable goods, those things that do not immediately wear out.

Vest pointed out that sales reported by motor vehicle dealers approached $473.9 million in August. That’s up more than 18 percent from the same time in 2010.

Hoffman sees two reasons for that.

First, he said, many people have more money to spend. Hoffman pointed to figures showing that while the number of people working has remained relatively steady, the amount of money the state is collecting in withholding from worker paychecks each month is going up.

“There’s some modest wage inflation,” he said.

At the same time, Hoffman said, people who have taken advantage of low mortgage interest rates have refinanced their homes.

“They’ve shaved $200, $300 off their mortgage payment,” he said, leaving them with more money in their pockets to spend.

The other aspect, he said, is pent-up demand.

“Stuff is wearing out,” Hoffman said. “The car needs to be replaced and the couch is falling apart.”

The report also showed a double-digit percentage increase in sales at restaurants and bars, as well as what is spent at hotels and motels. Vest noted, though, those year-over-year increases have been “pretty spotty,” with the increase some months being less than 1 percent.

Hoffman speculated that at least some of that may be due to an unusual event.

He pointed out that sales figures reported to the state in August reflect what people were buying in July. And that is the month Phoenix hosted the All-Star game for the first time in state history.

“I know it was only a few days,” Hoffman said.

“But there were probably some pretty big spenders in town,” he continued, spending in restaurants and hotels that generally are not the busiest this time of year. “And I’ll be the hotels didn’t cut their prices for that weekend like they do throughout most of the summer.”

He also said the local tourism industry may be benefitting from more Arizonans taking “staycations,” choosing to remain closer to home rather than drive to San Diego.

But Hoffman had a word of caution, based on the fact the figures represent July sales.

“If you look back, the wheels really didn’t come off (the economy) until the week of the 25th of July,” he said. Hoffman said he awaits next month’s report, which will reflect what people bought in August, to see if they are becoming more conservative in their spending.

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