Economy on the Rise
“A lot of things are going the right way,” said Brian Jones, a senior U.S. economist at Societe Generale in New York, whose private company was the closest to the February economic forecast among those surveyed by Bloomberg.
It appears that consumers are considering slightly higher payroll taxes and federal spending cuts as a temporary setback. They are spending more, and saving less. They are pur
chasing high ticket items such as automobiles. Confidence is rising because home values are increasing and the stock market is soaring.
Companies are ramping up hiring, adding 246,000 to private payrolls in February. They’re also expanding investment and rebuilding inventories as they put profits accumulated during the recovery to work.
Jones said: “The labor market is picking up momentum. Businesses are seeing demand. More people working means more people will be spending money. To a certain extent, this neutralizes the effects of higher taxes.”
Projections by businesses and consumers, from Barclays Plc and JPMorgan Chase & Co predict gross domestic product will rise at a 2 percent annual average pace in the latter six months of 2013 after a 1.5 percent rate in the first two quarters, said Dean Maki, chief U.S. economist at Barclays.
And as effects of the spending cuts dissipate, both business and consumers will increase spending.
Columnist-The Guardian Express