US Consumer Spending Rises

Consumer spending in the U.S. climbed more than forecast in January, reflecting the biggest increase in services in over 12 years as Americans began to enroll for the Obama administration’s health-care program.

Household purchases, which account for about 70 percent of the economy, rose 0.4 percent, after a 0.1 percent gain the prior month that was smaller than previously estimated, Commerce Department figures showed today in Washington. The median forecast of 76 economists in a Bloomberg survey called for a 0.1 percent rise. Incomes (PITLCHNG) advanced 0.3 percent.

Outlays on services were boosted by $29 billion at an annual rate in January based on estimates of Medicaid benefits and enrollments in the Affordable Care Act insurance exchanges, the Commerce Department said. Improvement in hiring and rising wealth underpinned by housing and stock-market gains will keep providing consumers with the means to spend on a broader swathe of goods and services that will boost economic growth.

“Consumer spending had OK momentum” in January, Brian Jones, senior U.S. economist at Societe Generale in New York, said before the report. “We expect to see better job growth in the spring. More people with jobs means more money to spend.”

Bloomberg

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Dean Popplewell

Dean Popplewell

Vice-President of Market Analysis at MarketPulse
Dean Popplewell has nearly two decades of experience trading currencies and fixed income instruments. He has a deep understanding of market fundamentals and the impact of global events on capital markets. He is respected among professional traders for his skilled analysis and career history as global head of trading for firms such as Scotia Capital and BMO Nesbitt Burns. Since joining OANDA in 2006, Dean has played an instrumental role in driving awareness of the forex market as an emerging asset class for retail investors, as well as providing expert counsel to a number of internal teams on how to best serve clients and industry stakeholders.
Dean Popplewell