Incomes are being buoyed by payroll growth. Employers added a net 236,000 workers in February after a 119,000 increase the prior month. Average hourly earnings climbed 2.1% from February 2012, matching the year-over-year gains in the previous two months as the strongest since March 2012.
Williams-Sonoma Inc. is among retailers enjoying a pickup in sales. Same-store purchases at the San Francisco-based company’s West Elm home-goods chain increased 19% in the fiscal fourth quarter, while sales at Pottery Barn Kids advanced 7.7%.
Some merchants are forecasting the pace of sales will be sustained. Macy’s Inc., the second-largest U.S. department-store chain, projects sales at stores open at least a year will rise 3.5% this year, after growing 3.7% in 2012.
“From a macro perspective, we think the customer is okay, not particularly strong, not particularly weak,” Karen Hoguet, chief financial officer at Macy’s, said at a March 14 conference. “We look at the momentum we have coming in to the year and we feel quite confident.” At the same time, “that doesn’t mean that we’re not cognizant of all that’s going on in Washington and what’s gone on with the payroll tax and every other factor,” she said.
Spending on big-ticket items like automobiles is also growing as households replace older vehicles and take advantage of low borrowing costs. Cars and light trucks sold at a 15.3 million annual rate in February after a 15.2 million pace the prior month, Ward’s Automotive Group data showed.
Rising stock prices and a recovering housing market are helping boost household finances. The Standard & Poor’s 500 Index closed at a record high of 1,569.19 yesterday. The S&P/Case-Shiller of property values in 20 U.S. cities jumped 8.1% in the 12 months to January, the biggest year-to-year gain since June 2006.
Even so, Americans’ moods are looking less upbeat. The Bloomberg Consumer Comfort Index fell last week for a second consecutive time to the lowest level since mid February.