The Norman Transcript

Nation/World

March 30, 2013

U.S. consumer spending, income jump

(Continued)

WASHINGTON —

“We’re now likely to see the fastest quarterly gain in real consumption in two years,” he said.

Jennifer Lee, senior economist at BMO Capital Markets, said the increases suggest consumer spending could be growing in the first quarter at an annual rate of more than 3 percent. That would be the fastest gain in more than three years and more than double the 1.3 percent rate in the fourth quarter.

Inflation, as measured by a gauge tied to consumer spending, increased 1.3 percent in February compared with a year ago. That’s well below the Federal Reserve’s 2 percent target, giving the central bank room to keep stimulating the economy without having to worry about price pressures.

Consumers spent more at the start of the year even after paying higher taxes. An increase in Social Security taxes has reduced take-home pay for nearly all Americans receiving a paycheck. And income taxes have risen on the highest earners. The tax increases both took effect on Jan. 1.

One reason the tax increases haven’t slowed the economy is companies have accelerated hiring and are slowly but steadily increasing wages.

Employers have added an average of 200,000 jobs a month since November. That helped lowered the unemployment rate in February to a four-year low of 7.7 percent. Economists expect similar strong job gains in March.

Businesses are also investing more in equipment and machinery, which has given factories a lift after a disappointing 2012.

And the housing recovery that began last year appears to be sustainable. In February, sales of previously occupied homes rose to the highest level in more than three years. The gains have helped lift home prices, which have made Americans feel wealthier.

Stock prices have also surged. On Thursday, the Standard & Poor’s 500 index closed at a record high of 1,569. That surpassed the previous record of 1,565 set in October 2007, a year before the peak of the financial crisis.

Three weeks ago, the Dow Jones industrial average beat its 2007 record.

Markets are closed Friday for the Good Friday holiday.

For local news and more, subscribe to The Norman Transcript Smart Edition, or our print edition.

Text Only | Photo Reprints
Nation/World
  • FedEx charges raising online pharmacy issues

    SAN FRANCISCO — FedEx Corp., the latest company accused in a federal probe involving illegal online pharmacies, says it will fight the charges that it knowingly shipped drugs to people who lack valid prescriptions....

    July 27, 2014

  • EU, U.S. seek to curb Putin’s Ukraine course

    BRUSSELS — Months after Russia annexed Crimea and stepped up support for separatists in eastern Ukraine, Europe and the United States are still searching for a way to persuade Russian President Vladimir Putin to change course....

    July 27, 2014

  • Fighting intense near crash

    DONETSK, Ukraine — Ukrainian armed forces mounted a major onslaught against pro-Russian separatist fighters Sunday in an attempt to gain control over the area where a Malaysia Airlines plane was downed earlier this month....

    July 27, 2014

  • Gaza war rages despite truce pledges

    GAZA CITY, Gaza Strip — Israel and Hamas launched new attacks Sunday in the raging Gaza war, despite going back and forth over proposals for a temporary halt to nearly three weeks of fighting ahead of a major Muslim holiday....

    July 27, 2014

  • Hamas fires rockets on Israel, ending 12-hour lull

    BEIT HANOUN, Gaza Strip — Hamas said it fired five rockets at Israel late Saturday after rejecting Israel’s offer to extend a 12-hour humanitarian cease-fire by four hours, casting new doubt on international efforts to broker an end to 19 ...

    July 27, 2014

  • Death shows Ebola can spread through air travel

    ABUJA, Nigeria — Nigerian health authorities raced to stop the spread of Ebola on Saturday after a man sick with one of the world’s deadliest diseases brought it by plane to Lagos, Africa’s largest city with 21 million people. The fact ...

    July 27, 2014

  • Police ID kids killed in Philly carjacking crash

    PHILADELPHIA — Two carjackers who fled after ramming a stolen SUV into a family selling fruit for their church, killing three young siblings, were still on the run Saturday as the reward for their capture topped $100,000. The children’s ...

    July 27, 2014

  • U.S.: Russia firing across border

    KIEV, Ukraine — Russia is launching artillery attacks from its soil on Ukrainian troops and preparing to move heavier weaponry across the border, the U.S. and Ukraine charged Friday in what appeared to be an ominous escalation of the ...

    July 26, 2014

  • Small holes cause big jitters

    SEOUL, South Korea — For the developers of the world’s sixth tallest building near Seoul, a mysteriously shrinking lake and the appearance of small sinkholes in residential neighborhoods couldn’t have come at a more inopportune time. ...

    July 26, 2014

  • Secret photo victims must describe trauma for case

    BALTIMORE — Thousands of women whose genitals might have been photographed during gynecological exams can share a $190 million settlement from Johns Hopkins Health System. But they’ll have to describe their trauma before seeing any money. ...

    July 26, 2014