US consumer spending probably spurred growth
Monday, 26 April 2010
NEW YORK, April 25 (Bloomberg): Consumer spending probably accelerated in the first quarter, shepherding the US expansion into 2010, economists project a report this week will show.
Gross domestic product grew at a 3.4 per cent annual pace after increasing at a 5.6 per cent rate in the last three months of 2009, according to the median estimate of 67 economists surveyed by Bloomberg News. Household purchases may have climbed by the most in three years.
Improving demand boosts the odds the recovery will be self- sustaining, benefiting companies such as Starbucks Corp., as rising sales lead to additional hiring, which in turn fosters even more spending. A lack of inflation gives Federal Reserve policy makers the green light to keep interest rates low when they meet this week to ensure the world's largest economy continues to grow.
Central bankers will keep the target for the benchmark borrowing cost on overnight loans between banks near zero at the conclusion of their two-day meeting on April 28, economists surveyed forecast.
Fed Chairman Ben S. Bernanke told Congress on April 14 that high unemployment and weak construction were among the "significant restraints" on the pace of growth. At their March 16 meeting, central bankers said economic conditions are likely to warrant "exceptionally low levels of the federal funds rate for an extended period."
Gross domestic product grew at a 3.4 per cent annual pace after increasing at a 5.6 per cent rate in the last three months of 2009, according to the median estimate of 67 economists surveyed by Bloomberg News. Household purchases may have climbed by the most in three years.
Improving demand boosts the odds the recovery will be self- sustaining, benefiting companies such as Starbucks Corp., as rising sales lead to additional hiring, which in turn fosters even more spending. A lack of inflation gives Federal Reserve policy makers the green light to keep interest rates low when they meet this week to ensure the world's largest economy continues to grow.
Central bankers will keep the target for the benchmark borrowing cost on overnight loans between banks near zero at the conclusion of their two-day meeting on April 28, economists surveyed forecast.
Fed Chairman Ben S. Bernanke told Congress on April 14 that high unemployment and weak construction were among the "significant restraints" on the pace of growth. At their March 16 meeting, central bankers said economic conditions are likely to warrant "exceptionally low levels of the federal funds rate for an extended period."