Warm Weather Lures Shoppers to Spend; Housing Still Weak

Factories responded to an increase in consumer spending in January, by cranking up production in February.

Analysts say the economy is showing strong growth after suffering for three months last year from the hurricanes along the Gulf Coast and high energy prices.


Thousands of executives with financial reporting responsibilities use the Comperio on-line library to access the type of information and interpretive guidance PricewaterhouseCoopers' own professional audit staff use around the world. Key content areas include guidance from the FASB, EITF, PCAOB, SEC, and others as well as PwC's interpretive guidance. Get more information and sign up for a complimentary 30-day trial.

The unusually warm weather in January apparently drew in the shoppers. Spending jumped 0.9 percent, which is the biggest increase in six months. An index of national factory activity rose to 56.7 in February, from 54.8 in January, according to Reuters.

"You can't keep a good consumer down and the American household is one great customer," Joel Naroff, chief economist at Naroff Economic Advisors, told the Associated Press.

Construction spending did not match January's rise in consumer spending-it grew only 0.2 percent, below expectations. Economists had predicted a 1.1 percent increase.

"The January gain in construction spending was surprisingly weak given the recent strength in housing starts and unseasonably warm weather," said Steven Wood, chief economist at Insight Economics.

Private home building increased only 0.1 percent. Residential construction is slowing, and some observers believe it will slow even more as mortgage rates increase.

A separate study showed that consumers felt less optimistic in February. While analysts had expected a consumer confidence index of 104.0, the index fell to 101.7 in February, from 106.8 in January. The report wasn't seen as alarming because it covers just one month, the AP reported.

"There is still a lot of uncertainty out there that is making people a little bit more cautious," said Gary Thayer, chief economist at A.G. Edwards & Sons Inc. But he added "consumers are still feeling pretty good."

You may like these other stories...

Traditional property tax bills may not continue to be the certainty that everyone assumes. Nationwide, there are increasing efforts to seek alternatives to a tax bite that, whether you support it or abhor it, draws a lot of...
By Teresa Ambord Liz Cheney – US Senate candidate and daughter of Dick Cheney – and her husband, Philip Perry, missed their property tax payment in 2012. Earlier that year, they bought a...
By Teresa Ambord Not many political potatoes are as hot as taxes. Whatever your opinion about state and local taxes, it's prudent now and then to gauge how the prevailing rates affect a state's fiscal health...

Already a member? log in here.

Upcoming CPE Webinars

Sep 18
In this course, Amber Setter will shine the light on different types of leadership behavior- an integral part of everyone's career.
Sep 24
In this jam-packed presentation Excel expert David Ringstrom, CPA will give you a crash-course in creating spreadsheet-based dashboards. A dashboard condenses large amounts of data into a compact space, yet enables the end user to easily drill down into details when warranted.
Sep 30
This webcast will include discussions of important issues in SSARS No. 19 and the current status of proposed changes by the Accounting and Review Services Committee in these statements.
Oct 23
Amber Setter will show the value of leadership assessments as tools for individual and organizational leadership development initiatives.