As the first quarter of the year comes to a close, consumer spending stayed soft, rising just 0.1% for the third consecutive month. Incomes have been rising faster than that rate, indicating that Americans seem to be saving rather than spending. Gross Domestic Product (GDP) growth also slowed. Consumer spending generates more than 2/3 of total US economic output. Economists are concerned but a recession is not being indicated yet since the markets stabilized and the job market appears to be on track.
On the home sales front, there is more optimistic news. Pending home sales jumped 3.5% in February, the highest level in 7 months. Pending sales offer insights into future sales activity. The Realtors’ is forecasting 5.4 million existing-home sales this year, an increase of 2.4% from 2015. The housing market in 2015 was the strongest since before the recession and 2016 seems stronger yet.
Source: Wall St. Journal
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