Consumer spending climbs more than forecast on U.S. services

Auto Sales

Purchases of big-ticket items like automobiles may keep growing as households replace older vehicles and take advantage of low borrowing costs. Cars sold at an average 15.3 million annualized rate in the first quarter, the most since the same period in 2008, Ward’s Automotive Group data showed.

Hiring is projected to pick up after employers added 88,000 jobs in March, the fewest in nine months. Payrolls grew by 150,000 in April, according to the median forecast in a Bloomberg survey. The unemployment rate held at a four-year low of 7.6%, it showed.

Rising stock prices and a recovering housing market are also boosting wealth. The Standard & Poor’s 500 Index has advanced 10.9% this year through April 26. Home values rose 7.1% in the year ended February, the biggest 12- month gain since May 2006, according to the Federal Housing Finance Agency.

Some retailers are seeing little progress in sales. At Safeway Inc., the second-largest U.S. supermarket chain, customers remain price-conscious, in part because confidence is yet to rebound to pre-recession levels, Chairman and Chief Executive Officer Steve Burd said.

Shoppers are “trying to be very careful with how they spend their dollars,” Burd said on an April 25 earnings call.

Still, Americans’ moods are improving. The Bloomberg Consumer Comfort Index held close to a five-year high in the week ended April 21 from the prior period.

Bloomberg News

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