Consumer spending in the US revived last month, rising 0.1% in February vs. January, the Bureau of Economic Analysis reports. The gain is slightly below expectations among economists, although the increase is the first monthly advance since last November. The directional shift back into positive territory is encouraging, but a closer look at the trend suggests that a softer run of growth persists. It’s still reasonable to wonder if the harsh winter is the source of the weaker growth, in which case warmer weather is the antidote. Based on today’s update, however, it’s clear that spending’s rise in the consumer sector continues to decelerate in annual. In fact, the same is true for disposable personal income, which continued to post a lesser rate of growth last month vs. the year-earlier level.
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The US real estate market has been sluggish in recent history, but the latest numbers hint that the sector may enjoy a stronger run of growth in the spring. The supporting evidence is still thin, although the sales trend has clearly improved in February, particularly for purchases of newly built single family homes. Is this a sign that the property market is firming? If it is, the outlook for the US economy will improve a bit.
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