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Mon Mar 12, 2012, 12:06 PM


Outlook for U.S. Consumer Spending Brightens on Employment Gains [View all]

By Bob Willis - Mon Mar 12 16:20:52 GMT 2012

Household spending may be about to pick up after stagnating for three straight months as employment and incomes climb and the weather turns more seasonable, giving the U.S. economy a lift.

“The situation for consumers has improved significantly over the last several months,” said Harm Bandholz, chief U.S. economist at UniCredit Group in New York. “Spending is bound to accelerate, the most important driver being improvement in the labor market.”

Employers boosted payrolls in February, capping the best six-month streak of job growth since 2006, Labor Department data showed last week. Consumer spending on utilities will probably return to normal after dropping from November through January because of unseasonably warm weather.

“Given the labor market and some of these weather factors, there is reason to be optimistic,” said Troy Davig, a senior economist at Barclays Capital Inc. in New York. “The warm weather has held down consumer spending, basically because of the direct impact of households purchasing less energy to heat their homes. That’s generally positive for the consumer, but the immediate impact has depressed consumption.”



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