New reports show that US consumers were unexpectedly more confident than economists predicted in March from the prior month as American optimism toward the economy has been on the rise.
According to Thomson Reuters/University of Michigan, consumer-sentiment hit a four-month high of 78.6, thus exceeding all estimates in a Bloomberg survey, 77.6 in February.
Experts say that Americans aren't as concerned about the sequester cuts because of lower gasoline prices, a steady growth in the stock market and prospects for the housing recovery.
"We will start to see the consumer become a little more engaged this summer and into the second half of the year," Russell Price, senior economist at Ameriprise Financial Inc. in Detroit, told Bloomberg Businessweek. "We are going to see some improvement in consumer confidence as we go forward and people put concerns about the sequester behind them."
In addition, a recent report revealed that US consumers earned more and spent more during the month of February as the job market strengthened.
Purchases, which account for about 70 percent of economic activity, rose 0.7 percent in February from January which is the biggest gain in five months.
Americans spent more due to that fact that after-tax income rose 1.1% last month which followed January's 3.7% plunge and December's 2.6% surge. This jump occurred due to the urge to pay bonuses and dividends by December before taxes increased in 2013.
In addition to the steady economic growth, company hiring and wages have progressively increased, businesses are investing more in equipment and machinery, the housing recovery appears to be strengthening and stock prices have surged.
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