The Fed’s asset purchases have helped support the recovery in the face of the government’s budget cuts and the 2 percentage point increase in the payroll tax that took effect in January.
The central bank’s mortgage bond purchases have driven home-loan rates to record lows. The national average 30-year fixed-rate mortgage was at 3.63% as of March 14, up from a record low 3.31% in November, according to an index from Freddie Mac.
JPMorgan Chase & Co. this week more than doubled its forecast for U.S. home-price gains in 2013 to 7% and predicts a more than 14% increase through 2015. Bank of America Corp. said this month property values will jump 8% this year, up from a prior estimate of 4.7%.
Retail sales climbed 1.1% in February, exceeding all projections in a Bloomberg survey of economists, for the biggest gain in five months. Sales are up 4.6% from a year earlier, according to a Commerce Department report.
Executives at Macy’s Inc., the second-largest U.S. department-store chain, feel “pretty good” about the U.S. economy and believe promotional events can help attract customers even after payroll taxes rose this year, according to Chief Financial Officer Karen Hoguet. The Cincinnati-based retailer last month posted annual profit that surpassed analysts’ estimates.
“We feel good about the consumer in 2013,” Hoguet said in a March 13 conference presentation sponsored by Bank of America. “Every indication we’re seeing is that he and she are doing fine, still buying.”