With demand for autos reaching a nearly six-year high, consumer spending was expected to rise in August for a fourth consecutive month, economists said before reports this week.
Purchases increased 0.3% after a 0.1% advance in July, according to the median forecast in a Bloomberg survey of 64 economists before Commerce Department data issued Sept. 27. Other reports are expected to show a rise in orders for large-ticket items other than transportation equipment and an increase in new-home sales.
A falling jobless rate may be making Americans feel more secure in their jobs, while rising real-estate values and record stock prices give households the means to spend. Automakers are reaping the benefits of pent-up demand and easier access to credit that is helping sustain the economic expansion.
The Commerce Departments spending figures this week will further show that personal income rose 0.4% in August, the biggest gain since February, after a 0.1% gain a month earlier, the survey showed. Faster job gains would drive wage increases needed to give household purchases a biggest lift.
Employers created 169,000 jobs last month, fewer than economists projected, and increases in the prior two months were revised down, Labor Department figures showed this month. The unemployment rate fell as workers left the labor force.
The record-low mortgage rates resulting from the Feds policy boosted demand for houses and property values.
The S&P/Case-Shiller index of home prices in 20 cities jumped 12.4% in July from the same month in 2012, the biggest gain since February 2006, according to the Bloomberg survey median ahead of the groups report on Tuesday. Borrowing costs began climbing in June amid speculation the Fed was close to trimming stimulus. The rate on a 30-year fixed mortgage averaged 4.58% in the week ended Aug. 22, compared with 3.35% as recently as early May. The jump slowed the housing recovery, with housing starts and sales of new homes lagging behind economists forecasts.
Other reports this week may show a rebound in consumer confidence has stalled as interest rates rise and concern mounts the federal government will be forced to shut down if officials fail to reach a compromise on increasing the debt ceiling, according to economists surveyed.
