Bloomberg News

Consumer Spending in U.S. Likely Rose on Autos

March 30, 2012

Pedestrians look at a Ferrari in a showroom in New York. Photographer: David Paul Morris/Bloomberg

Pedestrians look at a Ferrari in a showroom in New York. Photographer: David Paul Morris/Bloomberg

Consumer spending probably climbed in February as an improving job market prompted Americans to buy more cars, economists said before a report today.

Purchases rose 0.6 percent, the most in five months, after a 0.2 percent gain in January, according to the median estimate of 83 economists surveyed by Bloomberg News. Another report may show consumer sentiment held near a one-year high, restrained by higher gasoline prices.

Households may be poised to take a more active role in the expansion as the biggest payroll gains since 2006 underpin confidence and boost paychecks. Strengthening employment may also provide the means to weather rising fuel costs as gasoline approaches $4 a gallon.

“Consumers do seem to have some decent income growth, so that’s positive for consumer spending,” said Nigel Gault, chief U.S. economist at IHS Global Insight in Lexington, Massachusetts. “Overall, the gas drag this year is not as important as it was last year. The recovery is less vulnerable to being blown off course.”

The Commerce Department’s spending report is due at 8:30 a.m. in Washington. Estimates in the Bloomberg survey ranged from gains of 0.1 percent to 0.8 percent.

The same report will probably show incomes advanced 0.4 percent following January’s 0.3 percent gain, according to the survey median.

Auto Sales

Cars last month sold at the fastest pace in four years, led by Chrysler Group LLC and a surprise gain from General Motors Co. Light-vehicle sales accelerated to a 15 million annual rate, the strongest since February 2008, according to data from Ward’s Automotive Group.

Consumer spending grew at a 2.1 percent annual rate last quarter, compared with a 1.7 percent pace in the previous three months, Commerce Department figures showed yesterday. The world’s largest economy expanded at a 3 percent pace from October through December.

More income and a strengthening labor market are giving households the means to purchase big-ticket items, benefiting companies like motor-home maker Winnebago Industries Inc. (WGO:US)

“We’re beginning to see positive signs that the economy is improving,” Randy Potts, chief executive officer of the Forest City, Iowa-based company, said on a March 15 conference call. “Consumer confidence has been trending higher and the jobless rate is improving.”

Investors are optimistic about retailers’ prospects. The Standard & Poor’s Supercomposite Retailing Index has increased 18 percent since the end of last year compared with a 12 percent gain in the broader S&P 500.

Higher gasoline prices may have put an end to a six-month run of gains in consumer sentiment. The Thomson Reuters/University of Michigan final March confidence index fell to 74.5 from 75.3 the previous month, the survey median showed. That would be the first monthly decline since August.

The price of a gallon of regular unleaded gas was $3.92 as of March 28, up 64 cents since the end of last year, according to AAA, the nation’s largest automobile association.

                      Bloomberg Survey
================================================================
                              Pers     Pers  Chicago  U of Mich
                               Inc    Spend       PM    Conf.
                              MOM%     MOM%    Index    Index
================================================================
Date of Release              03/30    03/30    03/30    03/30
Observation Period            Feb.     Feb.    March  March F
----------------------------------------------------------------
Median                        0.4%     0.6%     63.0     74.5
Average                       0.4%     0.6%     63.0     74.6
High Forecast                 0.6%     0.8%     67.0     78.0
Low Forecast                  0.2%     0.1%     59.7     72.0
Number of Participants          78       83       58       63
Previous                      0.3%     0.2%     64.0     74.3
----------------------------------------------------------------
4CAST                         0.4%     0.5%     61.0     74.5
ABN Amro                      0.4%     0.6%     62.0     74.0
Action Economics              0.4%     0.8%     63.0     74.0
Aletti Gestielle              0.4%     0.5%     63.5     74.6
Ameriprise Financial          0.4%     0.5%     62.5     75.0
Banca Aletti                  0.4%     0.4%     64.0     74.8
Banesto                       0.4%     0.7%     64.2     75.0
Bank of Tokyo-Mitsubishi      0.4%     0.7%     ---      ---
Bantleon Bank AG              0.3%     0.6%     62.0     74.5
Barclays Capital              0.4%     0.6%     64.5     75.0
Bayerische Landesbank         0.4%     0.6%     63.0     74.5
BBVA                          0.3%     0.6%     64.5     74.5
BMO Capital Markets           0.5%     0.8%     63.0     75.0
BNP Paribas                   0.3%     0.6%     62.5     75.0
BofA Merrill Lynch            0.4%     0.8%     62.5     74.0
Briefing.com                  0.3%     0.8%     62.0     73.5
Capital Economics             0.4%     0.6%     ---      74.3
CIBC World Markets            0.4%     0.5%     ---      ---
Citi                          0.3%     0.8%     61.0     75.0
ClearView Economics           0.4%     0.5%     60.0     72.0
Comerica                      0.3%     0.2%     ---      ---
Commerzbank AG                0.4%     0.6%     62.0     ---
Credit Agricole CIB           0.3%     0.6%     64.0     74.3
Credit Suisse                 0.3%     0.7%     ---      74.5
Daiwa Securities America      0.4%     0.5%     ---      74.0
Danske Bank                   0.5%     0.6%     64.2     74.9
DekaBank                      0.4%     0.5%     63.0     75.0
Desjardins Group              0.3%     0.6%     62.0     74.3
Deutsche Bank Securities      0.4%     0.6%     65.0     75.0
Deutsche Postbank AG          ---      0.4%     ---      74.3
DZ Bank                       0.3%     0.4%     63.5     ---
Exane                         ---      0.6%     62.0     ---
Fact & Opinion Economics      0.4%     0.7%     64.0     74.5
First Trust Advisors          0.3%     0.6%     62.7     75.0
FTN Financial                 0.5%     0.6%     61.0     74.0
Helaba                        0.6%     0.5%     63.0     ---
High Frequency Economics      0.5%     0.6%     60.0     ---
HSBC Markets                  0.4%     0.6%     61.0     74.0
Hugh Johnson Advisors         0.5%     0.6%     65.0     75.0
IDEAglobal                    0.4%     0.5%     66.0     75.0
IHS Global Insight            0.3%     0.7%     63.5     75.4
Informa Global Markets        0.3%     0.6%     64.4     75.0
ING Financial Markets         0.4%     0.6%     61.0     73.5
Insight Economics             0.3%     0.6%     65.0     74.0
J.P. Morgan Chase             0.4%     0.4%     ---      75.0
Janney Montgomery Scott       0.2%     0.7%     ---      ---
Jefferies & Co.               0.4%     0.6%     65.0     73.8
Landesbank Berlin             0.5%     0.6%     60.0     73.0
Landesbank BW                 0.4%     0.5%     64.5     74.3
Maria Fiorini Ramirez         0.4%     0.6%     ---      ---
Market Securities             ---      0.7%     ---      ---
MET Capital Advisors          ---      0.1%     ---      ---
Mizuho Securities             0.3%     0.5%     65.0     75.0
Moody’s Analytics             0.3%     0.8%     64.5     75.0
Morgan Keegan & Co.           0.4%     0.5%     ---      ---
Morgan Stanley & Co.          0.4%     0.7%     ---      ---
National Bank Financial       0.4%     0.5%     ---      ---
Natixis                       0.4%     0.5%     ---      ---
Nomura Securities             0.4%     0.4%     63.0     ---
Nord/LB                       0.4%     0.4%     63.5     74.0
OSK Group/DMG                 0.5%     0.8%     ---      74.9
O’Sullivan                    0.3%     0.7%     ---      76.8
Parthenon Group               0.6%     0.8%     59.7     74.9
Pierpont Securities           0.3%     0.6%     ---      75.0
PineBridge Investments        0.5%     0.6%     60.0     76.0
PNC Bank                      0.4%     0.6%     ---      ---
Raiffeisenbank International  0.2%     0.5%     ---      74.3
Raymond James                 0.4%     0.5%     60.0     73.8
RBC Capital Markets           0.4%     0.7%     62.0     74.0
RBS Securities                0.3%     0.5%     ---      ---
Scotia Capital                0.4%     0.6%     ---      ---
SMBC Nikko Securities         0.3%     0.4%     67.0     78.0
Societe Generale              0.4%     0.8%     66.0     74.5
Standard & Poor’s             0.4%     0.8%     63.0     74.0
Standard Chartered            0.5%     0.4%     65.5     75.0
Stone & McCarthy Research     0.4%     0.4%     63.2     75.0
TD Securities                 0.4%     0.6%     62.5     74.5
UBS                           0.3%     0.6%     62.0     75.5
Union Investment              0.3%     0.4%     ---      74.3
University of Maryland        0.4%     0.7%     63.3     75.0
Wells Fargo & Co.             0.3%     0.5%     ---      ---
WestLB AG                     0.3%     0.5%     63.0     75.0
Westpac Banking Co.           ---      ---      ---      74.5
Wrightson ICAP                ---      0.6%     63.0     75.0
================================================================

To contact the reporter on this story: Timothy R. Homan in Washington at thoman1@bloomberg.net

To contact the editor responsible for this story: Christopher Wellisz in Washington at cwellisz@bloomberg.net


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Companies Mentioned

  • WGO
    (Winnebago Industries Inc)
    • $25.04 USD
    • -0.14
    • -0.56%
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