Consumer spending in the U.S. likely climbed in May by the largest amount in three months, fueled by growing demand for automobiles, according to economists surveyed by Bloomberg ahead of a report this week.
The projected 0.3% gain in purchases would follow a 0.2% fall in April, the first drop in a year, according to the median forecast of 63 economists surveyed ahead of Commerce Department data. The Commerce Departments report is expected to show incomes grew 0.2% last month after being unchanged in April.
Income gains are being supplemented by a recovery in home prices and sales to help boost household finances and spending. The S&P/Case-Shiller index of home values for 20 cities probably rose 10.6% for the year ended April after a 10.9% increase in March that was the biggest year-over-year advance since 2006. Figures from the Commerce Department the same day are expected to show sales of new homes rose to a 460,000 annualized pace in May, the highest since July 2008, according to the Bloomberg survey median.
Elsewhere, automobile dealers, restaurants and furnishing retailers are reporting improved sales as the housing rebound and overall gain in stocks boost shoppers spirits and finances. Federal Reserve policy makers last week said they are betting the economy will pick up and unemployment will fall, opening the way for central bankers to trim bond purchases later this year.
Home construction also is giving a lift to auto manufacturers, which are seeing an increase in U.S. sales of trucks and vans. Cars and light trucks sold at a 15.2 million annualized rate in May, a 2.4% increase from the previous month, according to industry figures.
Also this week, according to the economists surveyed, a Commerce Department report released this week will show that gross domestic product grew at a 2.4% annualized pace from January through March, unchanged from the prior estimate.