Consumer spending rose considerably in February, according to the latest government data, and while higher prices for staples such as gasoline drove some of the increase, economists said that Americans are undeterred. Rather than cutting back, they are saving less to finance their spending.
Stronger employment numbers and broader improvement in the U.S. economy over the past several months have boosted sentiment, allowing people to feel more secure in their jobs and fueling higher spending. While the increase in payrolls in March was disappointingly low, the average monthly jobs gains remain above 200,000 notes Julian Jessop, chief global economist at Capital Economics.
As the labor market continues to improve, income growth will likely further boost consumer spending.
Wall Street just closed out its best first quarter since 1998, and while most experts believe stocks will continue to head higher this year, the recent momentum will subside, and there could be a few dips along the way.
