"Home prices are going up, and with also the improvement in the unemployment rate, people will be more willing to buy"
- Nayantara Hensel, chair of the NABE survey and a business professor at National Defense University
Consumer spending in the world's largest economy is expected to accelerate this year, while government spending will decline at a faster rate, according to a survey of business economists. Economists also predict the economy to expand 2.4% this year and 3% next year, estimates unchanged from their forecast in February. Due to the improvement of the labour market, economists now are more bullish on consumer spending and property market than they were three months ago. Consumer spending is now forecast to rise 2.3% this year, up from a forecast of 1.9% in February. Respondents are now also more upbeat about auto sales, predicting 15.4 million vehicles sales, an increase of 1 million over the previous year. Earlier this month, a report from the Conference Board showed that the economy is benefiting from steady job gains and the housing market, offsetting tax hikes and budget cuts.
"Home prices are going up, and with also the improvement in the unemployment rate, people will be more willing to buy," Nayantara Hensel, chair of the NABE survey and a business professor at National Defense University said in an interview.
"The overall tone of this report was quite encouraging as it suggests that U.S. consumers are continuing to successfully navigate against the steady fiscal headwinds," said Millan Mulraine at TD Securities.
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