US Consumer Spending expected to increase?

It was reported, according to a survey of business economists, that Consumer Spending in United States was expected to increase this year. Their February forecast of US Gross Domestic Product (GDP) to expand by 2.4% this year and by 3% during next, was confirmed again. The survey was released today by the National Association for Business Economics (NABE), which surveys economists for banks, manufacturers and universities on a periodical basis. 49 economists were questioned between April 16th and April 30th, as they made estimates that consumer spending in United States would rise by 2.3% during 2013. That was a change upwards of their previous (February) forecast of 1.9% increase.

Surveyed economists were optimistic about situation with the auto sector, making a forecast of 15.4 million automobiles to be sold, which was expected to be 1 million units more, compared to 2012 sales figures.

The chair of the NABE survey, Nayantara Hensel, stated that consumer spending was likely to be bolstered by profits in the stock market, as well as situation with housing sector and potentially lower levels of unemployment. Predictions were made, that house prices would increase by 4.4% during 2013 and by 4% the year after.

Economists from NABE, surveyed before the release of the official unemployment rate data during April (7.5%), predicted a reduction of this rate to 7.4% in Q4 this year and a slow down to 6.8% during 2014.

As a counterpoint to consumer spending boost, the government sector is likely to contract by 2.3% this year, surpassing the previous forecast from February for 1% reduction, before the automatic federal spending cuts kick in. Government spending would reach a decline of 0.9% during 2014, economists stated, as forecast figures could change if federal spending cuts were to continue during the next fiscal year.

Lastly, the NABE economists were more conservative, regarding inflationary expectations. They predicted a 1.9% rise in inflation during 2013 and 2.1% during next year.