Ahead of the Bell: US Consumer Spending
WASHINGTON (AP) — The Commerce Department reports how much consumers spent and earned in March. The report will be released Thursday at 8:30 a.m. Eastern.
SPENDING ACCELERATES: The forecast is that spending rose 0.6 percent in March, according to a survey by FactSet. It had grown 0.3 percent in February. The expectation is that incomes grew 0.5 percent last month, up from a February increase of 0.3 percent.
MODEST GROWTH: Overall economic growth and consumer spending gains were meager in the first three months of 2014. Winter storms and freezing temperature derailed economic activity for much of the period.
Gross Domestic Product grew at an annual rate of 0.1 percent in the first-quarter, the government reported Wednesday. Consumer spending grew at a 3 percent annual rate last quarter. But that gain was dominated by a 4.4 percent rise in spending on services, reflecting higher utility bills.
But growth began to recover with warmer weather in March.
Retail sales jumped 1.1 percent in March, led by strong gains in sales of autos, furniture and a number of other products.
Economists believe that warmer weather will encourage people to make purchases that they had not during a wave of winter storms. Consumers account for 70 percent of U.S. economic activity, so spending on that front is critical in fueling a stronger recovery.
Employers added 192,000 jobs in March and 197,000 in February, after slight gains in the preceding months. The hiring should help to drive income and spending gains in March.
The Labor Department will issue the April employment report on Friday. Economists project that 210,000 jobs were added.
Payroll processer ADP said Wednesday that private employers added 220,000 jobs in April, the most since November and up from 209,000 in March.