The best-performing sector of the American stock market this year, bar energy, has been the "consumer discretionary" category — the companies that sell the things we like to buy but don't have to buy.

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Data: FactSet; Chart: Chris Canipe/Axios

The big picture: It's also been one of the main drivers of the market as a whole. While the broad stock market is up a very impressive 332% from its 2009 lows, consumer discretionary stocks are up a stunning 630%.

  • To be sure: A large chunk of that growth is thanks to just two stocks: Amazon and Netflix. But it's worth pausing to appreciate that two of the highest-flying technology stocks (three, if you include Apple) get most of their revenues by selling their products directly to consumers. That certainly wasn't the case in the days of the Wintel duopoly of Microsoft and Intel.
  • Neither Amazon Prime nor Netflix is a necessity in life. But both of them have already passed 100 million paying subscribers. (For scale: There are about 125 million households in the U.S.)

The bottom line: We're in a virtuous cycle, where record-low unemployment (just 3.7%, in September) feeds into job security, heightened consumer confidence and higher spending. In turn, that drives corporate growth in profits and headcount.

  • None of this is reliant on low interest rates. The healthy economy means that the Fed will keep on hiking, as a glance at the two-year bond yield will attest. Long bond yields, too, are hitting five-year highs. It almost feels like we're back to normal.

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