U.S. Consumer Spending Climbs a Fifth Straight Month as Recovery Quickens

[Purveyor]

Source: BLOOMBERG

By Timothy R. Homan

March 29 (Bloomberg) -- Consumer spending in the U.S. rose in February for a fifth consecutive month, a rebound that will require gains in employment to be sustained.

The 0.3 percent increase in purchases matched the median forecast of economists surveyed by Bloomberg News and followed a 0.4 percent advance in January, Commerce Department figures showed today in Washington. Incomes were unchanged, falling short of expectations as winter storms hurt hiring and hours worked.

Best Buy Co. and Nike Inc., which have reported higher- than-anticipated profits, are among companies that may keep benefitting as the emerging recovery gives Americans the confidence to buy. The pickup in purchases has caused the household savings rate to drop to the lowest level in more than a year, underscoring the need for more jobs to ensure the recovery is maintained.

“Considering the circumstances, this is a fine performance with the job market still not strong,” said Michael Moran, chief economist at Daiwa Securities America Inc. in New York. “As the labor market comes back, we should see continued support from consumers.”

Stocks and commodities rose on signs the world’s largest economy will keep growing and as concern waned over the Greek government’s deficit. The Standard & Poor’s 500 Index advanced 0.6 percent to 1,173.35 at 11:22 a.m. in New York.

Read more: http://www.bloomberg.com/apps/news?pid=20601087&sid=aNAFF6TIVZXc&pos=3

[brentspeak]

1. Business Week uses a different headline: "Consumer Spending Increases as Incomes Stagnate"

http://www.businessweek.com/news/2010-03-29/u-s-economy-consumer-spending-increases-as-incomes-stagnate.html

[KoKo]

3. Yes...savings are down again as people use them to make purchases they

may need. Not a good sign.

[CountAllVotes]

4. yes savings are down alright

and it might be because you can only get >1% interest on any money that you might be lucky enough to have left in a money market account!

:mad:

:argh:

:kick:

[defendandprotect]

9. And as long as we have corporate control of government, incomes will continue to stagnate -- !!

Been going on since Carter years --

[KoKo]

10. Absolutely...when will folks wake up to this?

:shrug:

[backtomn]

2. Sounds good, but.......

All reports are suggesting that the 9.7% unemployment could be very close to that at the end of the year. I like good news, but it is hard to do a victory dance with so many people unemployed (including me.....for disclosure purposes). Not necessarily for me.....but we must do something for jobs.

[dtotire]

5. U.S. Consumer Spending Up Modestly

Source: NYTimes

By JAVIER C. HERNANDEZ
Published: March 29, 2010


A weak jobs market crimped the paychecks of Americans in February, a government report indicated on Monday, with household incomes remaining flat.

But even as wages held steady, consumers were more willing to part with the little cash they had on hand. Spending rose 0.3 percent, or $34.7 billion, compared with January, the Commerce Department said, meeting expectations.
Bernard Baumohl, chief global economist at the Economic Outlook Group, said the data was an “unambiguous sign that consumers are growing more confident.”

“There is an enormous amount of pent-up demand and now it is being unleashed,” Mr. Baumohl said.
Economists expect spending to rise modestly this year. But consumer confidence is still at extraordinarily low levels, and economists believe the nation’s stubbornly weak labor market — the unemployment rate stands at 9.7 percent — will continue to constrain spending.

In addition, Americans, still nervous about the economy, will probably keep a higher-than-usual proportion of their income in savings. Though the saving rate fell to 3.1 percent last month, after pushing above 4 percent last year, economists cautioned that month-to-month data could be erratic. The saving rate in the first quarter of 2008 was 1.2 percent.

“Households are gradually altering their behavior in the face of large capital losses in investment and real estate portfolios, a weak labor market, and tight credit,” Joshua Shapiro, chief economist for MFR, wrote in a research note.

The labor market continues to shed jobs on a monthly basis, though the pace of losses has decreased and economists believe that the economy may have created jobs in March.
Still, even if jobs start reappearing, wages are expected to remain suppressed.

Wages and salaries, which make up more than half of personal income, were largely flat in February, increasing by $2.7 billion.
Spending on long-lasting goods, like cars and air-conditioners, was weaker in February than spending on items like food and clothing.

In its report on Monday, the Commerce Department said spending levels in January were less robust than previously thought, rising 0.4 percent rather than the original forecast of 0.5 percent. Income was higher than originally reported, rising 0.3 percent rather than the original report of 0.1 percent.




http://www.nytimes.com/2010/03/30/business/economy/30econ.html?hp

Read more: http://www.nytimes.com/2010/03/30/business/economy/30econ.html?hp

[AnneD]

6. Eventually you do have to buy....

Food, gas for your car, and move out of that big card board box.:evilfrown:

[defendandprotect]

7. Evidently, still $600 TRILLION in derivatives to be dealt with . . . if we have a recovery it

has to include the homeless and the longterm unemployed, as well!!

Remember, only a few weeks ago, Obama was saying "The stimulus saved us from a depression."

That was quickly scrubbed from the net -- but it is what he originally said!

[Kingofalldems]

8. And Yes!

[hayu_lol]

11. Recovery?

Why are businesses closing and people are still losing jobs at the almost half million jobs a month rate?

Things break and wear out. People tend to try and replace those items when that happens.

Ain't no recovery around this corner of the planet that I can see.