Post-Holiday Spending Surprisingly Robust
Comment on U.S. Bureau of Census Retail Sales Report: Kathy Bostjancic, Director of Macroeconomic Analysis, The Conference Board
NEW YORK, March 13, 2013 /PRNewswire/ — With a gain of 1.1 percent in February, consumer spending remains relatively robust. Job growth has been strong, income growth has picked up a little, as has consumer sentiment. Additionally, households’ net worth continues to recover, powered by the strong equity market gains and rise in home prices. And the momentum from the housing market is evident in the retail market. All of these factors supported the rise in spending, despite the hike in withholding rates. Still, that rise in the tax bite together with the cumulative impact of federal government spending cuts could potentially put household buying back on the slow simmer for a while. The key to where spending is headed this spring and summer is whether the momentum from the housing market can deliver impetus to consumer spending power and sentiment to offset the negative drag from budget cuts.
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SOURCE The Conference Board