Consumer Spending, Good News | featured news

U.S. economic growth accelerated from January through March, buoyed by the strongest consumer spending in more than two years. The strength offset further declines in government spending that are expected to drag on growth throughout the year.

Consumer spending rose in February and sentiment among Americans perked up this month, further signs of an acceleration in economic activity in the first quarter after a near stall in late 2012.

Retail sales rose more than expected in February as Americans bought motor vehicles and a range of other goods even as they paid more for gasoline, suggesting consumer spending this quarter will hold up despite higher taxes.

U.S. consumers increased their spending in December at a slower pace, while their income grew by the largest amount in eight years. Income surged because companies rushed to pay dividends before income taxes increased on high-earners.

U.S. economic growth picked up in the third quarter as a late burst in consumer spending and a surprise turnaround in government outlays offset the first cutback in business investment in more than a year.

U.S. retail sales rose in September as Americans bought more cars and gasoline, while a gauge of consumer spending pointed to stronger-than-expected economic growth in the third quarter.

U.S. consumer spending got off to a fairly firm start in the third quarter, rising by the most in five months and offering hope economic growth would pick up this quarter. Other data on Thursday showed the number of Americans filing new claims for jobless benefits held steady last week.

The economy grew slightly faster in the spring than previously estimated but remained dangerously weak in the face of high unemployment and higher gas prices. Many economists foresee slightly better growth in the current July-September quarter. The annual growth rate was 1.3 percent in the April-June quarter, up from an estimate of 1 percent made a month ago, the Commerce Department said Thursday. The improvement reflected modestly more consumer spending and a bigger boost from trade.

Spending rebounded strongly to post the largest increase in five months, the Commerce Department said.

Americans earned and spent more in March, but much of the extra money went toward more expensive gasoline.