What's going on?

Procter & Gamble (P&G) makes everyday products like razors and shampoo. It seems to be doing that successfully as it reported strong results on Tuesday, sending the stock up 2.5%. Given that P&G is a consumer goods company, these results suggest the consumer is doing all right (especially in the US).

What does this mean?

While P&G is technically a �consumer staples*� company rather than a �consumer discretionary�* one, its fortunes are still very much tied to the strength of the consumer (its $20 razors are almost certainly �discretionary!�). Globally, sales increased by 2% versus a decline in the previous quarter (excluding the effect of the changing value of currencies) – and the US division was the main driver of that improvement. While this isn�t exactly grand-slam home run type growth, it does give P&G�s new CEO, started on November 1st, something to build on.

*check out our new Glossary for explanations of consumer staples and consumer discretionary.

Why should I care?

The bigger picture: The consumer remains key to the US economy but is also a big question mark. In theory, low fuel prices should put more money in people�s pockets allowing them to pay higher prices for P&G�s goods � and spend more money buying �discretionary� items. So far, consumer spending hasn�t increased anywhere near as much as some investors would have thought. But, a major survey released on Tuesday suggests that people are still feeling pretty positive about the state of the economy – so let�s see if you�ll start pulling out your wallet more often.

For stocks: A rising dollar still creates a headwind for many stocks. P&G had hardly any revenue growth, but that�s because the stronger US dollar caused revenue to decline by almost 9%. It sells a lot of goods internationally, so when that revenue is translated back to the US, it�s worth less in US dollar terms. That can hurt the stock price � although remember that for international investors an increasing US dollar and a flat stock price is still a positive return (when viewed in terms of their home currency).