According to a report by Bloomberg, consumer spending in the U.S. rose to the highest in five months in February and it is expected to go up in March.
The Commerce Department released a data report Friday in Washington which stated that consumer spending in the U.S. rose to the highest in five months in February. Purchase, which accounts for 70 percent of the country's economy, rose by 0.7 percent in the month of February. In the month of January, a 0.4 percent rise was observed in consumer spending. These rise in numbers show that the job-market gains are helping Americans overcome tax increases and concern about federal budget cuts.
"The economy is in a very good place right now ahead of the fiscal restraint," said Chris Rupkey, chief financial economist at Bank of Tokyo-Mitsubishi UFJ Ltd. in New York. "There are no signs in the data that the expiration of the payroll-tax cut is affecting consumers whatsoever. This recovery is sustainable."
As Americans grow more optimistic about the outlook for the economy of the country, consumer confidence also saw a drastic climb in the month of February.
"Consumers discounted the administration's warning about economic catastrophe following the cuts in federal spending, and consumers have renewed their expectations that job gains will accelerate in the months ahead," Richard Curtin, the survey's chief economist, said in a statement.
Some merchants are saying the rate of sales will continue. Macy's, the second-largest U.S. department-store chain, said sales at stores open at least a year will rise 3.5 percent this year, after growing 3.7 percent in 2012.
"We think the customer is OK, not particularly strong, not particularly weak," Karen Hoguet, chief financial officer at Cincinnati's Ohio-based Macy's, said at a March 14 conference. "We look at the momentum we have coming into the year and we feel quite confident." At the same time, "that doesn't mean that we're not cognizant of all that's going on in Washington and what's gone on with the payroll tax," she said.
