By Timothy R. Homan
Dec. 23 (Bloomberg) -- Consumer spending in the U.S. probably rose in November for the sixth time in seven months as households took advantage of holiday discounting.
Purchases increased 0.7 percent for a second consecutive month, according to the median estimate of 72 economists surveyed by Bloomberg News. The report may also show incomes grew by the most in six months. Confidence and new-home sales probably also climbed, other reports may show.
Retailers such as Best Buy Co. are cutting prices on some items to help Americans overcome the worst employment slump in the post-World War II era and mounting foreclosures. Growing sales indicate consumers will contribute to, rather than hold back, the economic expansion in coming months.
“The U.S. consumer is mounting a comeback.,” said Chris Low, chief economist at FTN Financial in New York. “Despite a 10 percent unemployment rate, credit restrictions and political uncertainty, spending is growing again.”
The Commerce Department’s report is due at 8:30 a.m. in Washington. Estimates in the Bloomberg survey ranged from gains of 0.4 percent to 0.9 percent.
The report may also show incomes rose 0.5 percent last month, the biggest gain since May, according to the survey median. Estimates ranged from increases of 0.2 percent to 0.8 percent.
Auto dealers are among retailers seeing demand improve long after the government’s so called cash-for-clunkers plan expired. Cars and light trucks sold at a 10.9 million unit annual pace last month, up from a 10.5 million pace in October. Sales slumped in September, the month after the trade-in incentive ended.
More Discounting
Best Buy, the largest U.S. electronics retailer, is promoting notebook computers and $299 flat-screen televisions to lure consumers. As a result, the Richfield, Minnesota-based company will see its gross margin decline by as much as 1 percentage point in the fourth quarter, Chief Executive Officer Brian Dunn said on a Dec. 15 conference call with analysts.
The labor market remains a hurdle. The jobless rate is projected to exceed 10 percent through the first half of next year. Payrolls fell by 11,000 last month, bringing total job losses to 7.2 million since the recession began in December 2007, the most of any contraction since the Great Depression.
Consumer Confidence
Stock-market gains are boosting optimism among Americans. The Reuters/University of Michigan final reading on consumer sentiment for December, due about 10 a.m., is projected to climb to 73.8, its highest level since January 2008.
The Standard & Poor’s 500 Index yesterday closed at the highest level in almost 15 months after existing home sales in November topped forecasts. The National Association of Realtors said sales of previously owned houses rose 7.4 percent from the prior month to an annual pace of 6.54 million, the highest level in almost three years.
Another report from the Commerce Department today, due at 10 a.m., is forecast to show purchases of new homes rose 1.9 percent to a 438,000 annual pace last month, the highest level since August 2008, according to the survey median.
Lower interest rates, cheaper homes and a homebuyer tax credit are bolstering a housing market that contributed to the worst economic slump since the 1930s.
Bloomberg Survey
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Pers Pers U of Mich New Home
Inc Spend Conf. Sales
MOM% MOM% Index ,000’s
===============================================================
Date of Release 12/23 12/23 12/23 12/23
Observation Period Nov. Nov. Dec. F Nov.
---------------------------------------------------------------
Median 0.5% 0.7% 73.8 438
Average 0.5% 0.7% 73.9 435
High Forecast 0.8% 0.9% 76.4 460
Low Forecast 0.2% 0.4% 72.0 400
Number of Participants 68 72 59 72
Previous 0.2% 0.7% 73.4 430
---------------------------------------------------------------
4CAST Ltd. 0.5% 0.6% 75.5 425
Action Economics 0.5% 0.5% 73.4 435
Aletti Gestielle SGR 0.5% 0.7% 73.6 443
Ameriprise Financial Inc 0.2% 0.7% 74.0 435
Banesto 0.6% 0.5% 73.7 425
Bank of Tokyo- Mitsubishi 0.4% 0.7% 73.4 430
Bantleon Bank AG 0.4% 0.7% 73.0 430
Barclays Capital 0.4% 0.7% 73.5 420
Bayerische Landesbank --- 0.8% 74.2 ---
BBVA 0.5% 0.5% 73.8 434
BMO Capital Markets 0.3% 0.6% 74.0 440
BNP Paribas 0.5% 0.7% 73.0 440
BofA Merrill Lynch Resear 0.5% 0.6% 74.5 445
Briefing.com 0.6% 0.8% 74.5 420
C I T I C Securities --- --- 75.0 435
Calyon 0.4% 0.6% 73.4 437
Capital Economics 0.4% 0.8% 73.4 450
CIBC World Markets 0.6% 0.9% --- 443
Citi 0.3% 0.6% 73.5 440
ClearView Economics 0.4% 0.7% 72.0 460
Commerzbank AG 0.7% 0.6% 73.4 430
Credit Suisse 0.6% 0.6% 74.0 440
Daiwa Securities America 0.5% 0.5% --- 440
Danske Bank 0.6% 0.6% 76.4 435
DekaBank 0.5% 0.7% 74.0 440
Desjardins Group 0.4% 0.5% 73.5 435
Deutsche Bank Securities 0.8% 0.7% 74.0 450
Deutsche Postbank AG --- --- 74.0 ---
DZ Bank 0.5% 0.8% 74.0 435
Exane --- 0.6% --- 430
First Trust Advisors 0.4% 0.9% 73.5 444
Fortis --- 0.9% --- 450
Goldman, Sachs & Co. 0.3% 0.5% --- 422
Helaba 0.5% 0.7% --- 440
Herrmann Forecasting 0.5% 0.8% 73.7 438
High Frequency Economics 0.5% 0.8% 73.4 450
HSBC Markets 0.7% 0.8% 73.5 420
IDEAglobal 0.5% 0.6% 74.0 445
IHS Global Insight 0.4% 0.5% 74.0 442
Informa Global Markets 0.4% 0.9% 73.0 415
ING Financial Markets 0.4% 0.8% 75.0 440
Insight Economics 0.7% 0.5% 73.5 425
Intesa-SanPaulo 0.5% 0.7% 73.5 440
J.P. Morgan Chase 0.5% 0.4% 74.0 420
Janney Montgomery Scott L 0.5% 0.8% --- 440
Landesbank Berlin 0.5% 0.8% 73.4 440
Landesbank BW 0.6% 0.8% 73.8 445
Maria Fiorini Ramirez Inc 0.5% 0.6% --- 425
MF Global 0.4% 0.7% 72.5 400
MFC Global Investment Man 0.3% 0.7% 74.5 450
Mizuho Securities 0.2% 0.5% 73.0 430
Morgan Keegan & Co. 0.5% 0.7% --- 435
National Bank Financial --- --- --- 440
Natixis 0.4% 0.5% --- 439
Nomura Securities Intl. 0.3% 0.5% --- 422
Nord/LB 0.3% 0.7% 74.0 ---
PineBridge Investments 0.3% 0.6% 76.0 426
PNC Bank 0.3% 0.6% --- 415
Raiffeisen Zentralbank 0.2% 0.6% 73.5 460
Raymond James 0.6% 0.7% 74.0 440
RBC Capital Markets 0.4% 0.6% 74.0 438
Ried, Thunberg & Co. --- 0.4% 75.0 420
Schneider Foreign Exchang 0.3% 0.6% 74.0 427
Scotia Capital 0.3% 0.6% --- 450
Societe Generale 0.3% 0.6% 73.7 435
Standard Chartered 0.5% 0.6% --- 440
Stone & McCarthy Research 0.5% 0.8% 74.0 445
TD Securities 0.6% 0.6% 73.5 445
Thomson Reuters/IFR 0.5% 0.7% 74.5 450
UBS 0.5% 0.7% 74.0 415
University of Maryland 0.5% 0.5% 73.4 440
Wells Fargo & Co. 0.4% 0.6% --- 415
Westpac Banking Co. 0.4% 0.9% 73.5 434
Woodley Park Research 0.7% 0.7% 73.6 421
Wrightson Associates 0.3% 0.5% 75.0 420
===============================================================
To contact the reporter on this story: Timothy R. Homan in Washington at thoman1@bloomberg.net
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