US consumer spending rise in five months
Consumer spending probably increased in February by the most in five months as incomes rebounded, providing a kick for the U.S. economy at the start of the year, economists project a report to show this week.
Purchases rose 0.6 percent last month after climbing 0.2 percent in January, according to the median of 61 estimates in a Bloomberg survey before Commerce Department figures due on March 29. Other data may show the biggest gain in durable goods orders in five months and sustained strength in the housing market.
Resilient personal spending that accounts for 70 percent of the economy, along with advances in manufacturing and housing, points to a broadening of the expansion. Labor market progress and an increase in household wealth linked to rising home values and stocks are helping Americans navigate the hurdles of higher payroll taxes and elevated gasoline prices.
“Consumer spending is growing at a decent pace, given all the headwinds,” said Nigel Gault, chief U.S. economist for IHS Global Insight in Lexington, Massachusetts. “Capital goods orders are moving up again. That says something about domestic demand.”
The Commerce Department’s report may also show that incomes grew 0.9 percent following a 3.6 percent plunge in January that was the biggest since 1993, economists in the Bloomberg survey projected. A 2 percentage-point increase in the payroll tax rate went into effect at the start of the year.
Incomes are being buoyed by payroll growth. Employers added a net 236,000 workers in February after a 119,000 increase the prior month. Average hourly earnings climbed 2.1 percent from February 2012, matching the yearover-year gains in the previous two months as the strongest since March 2012.
Williams- Sonoma Inc. ( WSM) is among retailers enjoying a pickup in sales. Same- store purchases at its West Elm home.