US con­sumer spend­ing rise in five months

The Pak Banker - - INTERNATIONAL BUSINESS/SPORTS -

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.

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