Consumers are confident, but will they spend more?
This week’s economic news will shine a spotlight on the gap between the thoughts and actions of American consumers.
The latest reading on consumer confidence could bring an 18-year high, while a report on consumer spending will reveal whether those bullish views are starting to translate into brisker sales at the cash register. Also look for the third and final estimate of fourth-quarter economic growth.
Consumer confidence last month surged to the highest level since November 2000 on strong job and income growth and solid gains in stock and home prices. The market’s plunge this week occurred after the latest consumer survey. Spending, by contrast, has been mixed. Economists expect the Conference Board on Tuesday to report that its consumer confidence index was at an 18-year high in March.
Low housing inventories have been pushing up home prices sharply. Economists figure that trend continued in January. After rising 6.3% annually in December, economists estimate the S&P CoreLogic Case-Shiller home price index of 20 cities will show a 6.1% increase in January compared to a year earlier.
On Wednesday, the Commerce Department releases its final estimate of economic growth in the last three months of 2017. Its second estimate had the economy growing at a solid 2.5% annual pace. Housing starts and consumer spending could be revised up in this final appraisal, Nomura economist Lewis Alexander says.
All told, economists predict Commerce on Thursday will announce a modest 0.2% rise in consumption last month.