Shoppers Stroll down the street during the Christmas season in downtown Condotti Rome, 21. December 2009.
Credit: Reuters/Uccellini Lucia mutikaniPierdomenicoByWASHINGTON, DC | Wed Apr 29, 2011 at 2: 57 pm EDT
WASHINGTON (Reuters)-us consumers increased spending on the ninth straight month in March, as they were at a higher cost of food and gasoline, with inflation accounting of its largest profit for the year to 10 months.
Despite the rising cost of living increased slightly more optimistic the Americans about the economy this month and even dialed after their expectations of inflation in the medium and long term, another report showed on Friday.
Consumers seem to be the high cost of the move, but would be put to the test, when gasoline prices shooting above 4 dollars a gallon. National price for regular unleaded gasoline by 3.5 cents on a $ 3.88 in the week to Monday.
"My guess is that we will not show a further increase in energy prices, as we go through the year. Consumers will continue to contribute to the expansion, albeit in a supporting role, "said Richard DeKaser, Economist of the Parthenon Group in Boston.
Consumer spending, which propels the 70 percent of the economy, about 0.6 percent last month after advancing 0.9 percent in February, the Ministry of trade. But prices increased 0.4% month to nearly a month, leaving, spending only 0.2 percent after adjusting for inflation.
While the prices of commodities had been robbed by consumers purchasing power, entered in the second quarter with a slightly optimistic outlook.
Thomson Reuters/University of Michigan consumer sentiment index rose to 69.8 from 67,5 in March. In the survey, the annual inflation expectations haven't changed to 4.6%, but five to ten years of inflation, slipped into the 2.9 percent from 3.2 percent in March.
THE ROLE OF SPENDING LIFT
Improve the reliability and the strengthening of the labour market should promote, expenditure, even in the event that the price of gasoline remains high, say economists.
"We're looking for consumption in the second quarter growth will probably be similar to what we saw in the first quarter growth see (spending)," said Daniel Silver, Economist for JPMorgan in New York.
Consumer spending growth slowed to a pace of 2.7 percent in the first quarter after a 4 percent growth for the last three months of the year 2010, the Government announced Thursday.
The profit, which takes into account the expenditure data on Friday, that the factor behind the slowing in overall economic growth at 1.8 percent rate at the beginning of this year from 3.1 percent expansion in the last quarter of the year 2010.
MANUFACTURE OF REFRIGERATION?
The third report showed manufacturing activity in the country of the Midwest slowed this month, although he remained at the level, strong and did little to shake the data economists convictions that would pick up growth in the current quarter.
Economists said the tepid demand in the first quarter left the enterprises with less of a need to rebuild inventories.
"Significantly reduced the need for new orders and production of beef supplies and as a result, we are witnessing the production slow down a bit," said DeKaser.
"Production to get rid of sprint this year and still moving forward at a healthy clip."
A mixed economic report had little impact on us financial markets. Strong earnings from Caterpillar Inc., the largest manufacturer of heavy equipment in the world and the oil company Chevron Corp., Dow Jones industrial average in the row for its monthly performance since December.
The dollar fell to three-year low against a basket of currencies to views that the Fed's monetary policy stance will continue to be released. Prices for us government debt increased.
Caterpillar CEO Doug Oberhelman, said that he was positive on the short-term prospects of the US economy, but budget cuts were needed in Washington to put stronger foundation for growth.
"And pointing to the side (Obama) and members of Congress need to work hand in hand to find a solution, which will be the location of the US economy for the long-term strength," said Oberhelman.
SUBDUED WAGE GROWTH
Expenditure report showed consumer prices up 1.8 percent from a year ago – the largest profit in the 12 months since May.
The basic price Index, which strips food and energy costs, rose just 0.1 percent from February, maintaining its profit for the year to 0.9 percent, just above the lowest number of 0.7% in December.
Fed officials who monitor the base measures closely estimate the basic price trends, he said that they expect high food and energy costs to light wide inflation.
Revenue rose by 0.5 percent last month, following a 0.4 percent gain in February, but the wages and salaries advanced only 0,3 percent. The unemployment rate of 8.8% in the March growth subdued wage helps keep a lid on prices.
A separate report from the Ministry of labour has shown wages grew at a rate of tepid 0.4 percent in the first quarter and were only 1.6% a year ago.
( Andrea ricci Editing and Kenneth Barry)
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