By Timothy R. Homan March 29 (Bloomberg) -- Consumer spending in the U.S. probably rose in February for a fifth consecutive month, pointing to a nascent recovery that may gain traction as the economy starts creating jobs, economists said before a report today. Purchases probably increased 0.3 percent last month after rising 0.5 percent in January, according to the median estimate of 63 economists surveyed by Bloomberg News. The report may also show incomes advanced 0.1 percent for a second month. Growing demand means retailers such as Best Buy Co. may be able to sustain gains in profits even as Americans face mounting foreclosures and a jobless rate that economists anticipate will be slow to retreat from the 26-year high reached last year. Household spending, which accounts for about 70 percent of the economy, may contribute more to the expansion in coming months. “The consumer still faces a lot of headwinds -- very modest income growth and high unemployment,” said Ward McCarthy, chief financial economist at Jefferies & Co. Inc. in New York. “Consumers are going to play a more prominent role” in economic growth when the job market strengthens, he said. The Commerce Department’s report is due at 8:30 a.m. in Washington. Estimates in the Bloomberg survey ranged from no change to a 0.6 percent increase. Incomeestimates ranged from a decline of 0.2 percent to a 0.3 percent increase. Record Snowfall Spending last month may have been depressed by winter storms that brought record seasonal snowfall to cities from Baltimore to Philadelphia, shuttering some stores, according to economists such as Omair Sharif of RBS Securities Inc. Still, retail sales in February grew 0.3 percent, the most since November, the Commerce Department said March 12. Auto dealers are among retailers that may see a pickup in demand this month, said industry analysts such as J.D. Power & Associates and Edmunds.com. Cars and light trucks will sell at a 12 million unit annual pace in March, up from a 10.4 million pace in February, according to a Bloomberg survey. Other retailers are already seeing sales improve. Best Buy, the largest U.S. electronics retailer, last week reported fourth-quarter profit that exceeded analysts’ estimates as the Richfield, Minnesota-based company boosted sales by cutting prices on flat-panel TVs and offering discounts during the holidays. Spending Forecast Consumer spending slowed to a 1.6 percent pace in the last three months of 2009, from 2.8 percent the previous quarter, the Commerce Department said March 26. Purchases are expected to expand at a 2.3 percent rate in the first quarter of the year, according to economists surveyed this month. The labor market remains an obstacle and is putting pressure on lawmakers in Washington to implement policies that support job growth. The jobless rate is projected to end the year at 9.5 percent, according to this month’s survey. Unemployment reached 10.1 percent in October, the highest level since 1983. Payrolls fell by 36,000 workers in February, the Labor Department said this month. Economists anticipate the government’s employment report on April 2 will show the economy created 190,000 this month, according to the survey median. Job gains have yet to match growth in financial markets. The Standard & Poor’s 500 Index climbed 0.9 percent last week and reached an 18-month high on March 23 on signs the economic recovery was strengthening. Bloomberg Survey ============================================================== Pers Pers Core PCE Core PCE Inc Spend Prices Prices MOM% MOM% MOM% YOY% ============================================================== Date of Release 03/29 03/29 03/29 03/29 Observation Period Feb. Feb. Feb. Feb. -------------------------------------------------------------- Median 0.1% 0.3% 0.1% 1.3% Average 0.1% 0.3% 0.1% 1.3% High Forecast 0.3% 0.6% 0.2% 1.4% Low Forecast -0.2% 0.0% 0.0% 1.3% Number of Participants 58 63 46 21 Previous 0.1% 0.5% 0.0% 1.4% -------------------------------------------------------------- 4CAST Ltd. -0.2% 0.2% 0.0% --- Action Economics 0.2% 0.2% 0.0% --- Ameriprise Financial Inc 0.1% 0.3% 0.0% 1.3% Bank of Tokyo- Mitsubishi 0.2% 0.4% 0.1% 1.3% Bantleon Bank AG 0.0% 0.3% 0.1% --- Barclays Capital 0.1% 0.3% 0.0% 1.3% Bayerische Landesbank 0.0% 0.2% --- --- BMO Capital Markets 0.2% 0.5% 0.1% 1.3% BNP Paribas 0.1% 0.2% --- --- BofA Merrill Lynch Research 0.2% 0.3% --- --- C I T I C Securities --- 0.2% --- --- Citi 0.1% 0.3% 0.1% 1.4% ClearView Economics 0.2% 0.3% 0.1% --- Commerzbank AG 0.1% 0.3% 0.1% --- Credit Agricole CIB 0.1% 0.4% 0.1% --- Credit Suisse 0.1% 0.4% 0.0% 1.3% Danske Bank 0.0% 0.4% 0.1% 1.3% DekaBank 0.1% 0.2% 0.1% 1.3% Desjardins Group 0.2% 0.3% 0.1% 1.3% Deutsche Bank Securities 0.1% 0.3% 0.1% --- Deutsche Postbank AG --- 0.3% --- --- DZ Bank 0.1% 0.2% 0.0% --- First Trust Advisors 0.2% 0.4% --- --- Fortis --- 0.2% --- --- Helaba 0.0% 0.4% 0.1% 1.3% HSBC Markets 0.0% 0.3% 0.1% 1.3% IDEAglobal 0.2% 0.3% 0.1% 1.4% IHS Global Insight 0.0% 0.3% 0.1% --- Informa Global Markets 0.3% 0.2% --- --- ING Financial Markets 0.1% 0.4% 0.1% --- Insight Economics 0.0% 0.2% 0.0% --- Intesa-SanPaulo 0.0% 0.2% 0.1% --- Jefferies & Co. 0.1% 0.3% --- --- Johnson Illington Advisors 0.3% 0.5% --- --- Landesbank Berlin 0.1% 0.4% --- --- Landesbank BW 0.0% 0.2% --- --- Maria Fiorini Ramirez Inc 0.1% 0.2% 0.1% --- Moody’s Economy.com 0.1% 0.6% 0.1% --- Morgan Keegan & Co. 0.1% 0.3% --- 1.4% Morgan Stanley & Co. 0.2% 0.3% --- --- Natixis 0.1% 0.5% 0.1% 1.3% Nomura Securities Intl. 0.1% 0.4% 0.0% --- Nord/LB 0.1% 0.3% 0.1% --- PNC Bank 0.2% 0.3% 0.1% --- Raiffeisen Zentralbank 0.2% 0.3% 0.0% --- Raymond James 0.1% 0.2% 0.1% --- RBC Capital Markets 0.0% 0.3% 0.1% 1.3% RBS Securities Inc. 0.0% 0.3% 0.1% --- Ried, Thunberg & Co. --- 0.1% 0.1% 1.3% Schneider Foreign Exchange 0.0% 0.3% 0.2% --- Scotia Capital 0.2% 0.4% --- 1.4% Societe Generale 0.0% 0.3% 0.1% --- State Street Global Markets 0.1% 0.4% 0.1% 1.3% Stone & McCarthy Research 0.1% 0.2% --- --- TD Securities 0.2% 0.2% 0.1% 1.3% Tullett Prebon 0.2% 0.3% 0.1% --- Union Investment 0.2% 0.3% --- --- University of Maryland 0.2% 0.3% 0.0% --- Wells Fargo & Co. 0.2% 0.2% 0.2% 1.4% WestLB AG 0.1% 0.3% 0.1% 1.3% Westpac Banking Co. 0.0% 0.4% 0.0% --- Woodley Park Research 0.0% 0.4% 0.1% --- Wrightson Associates --- 0.0% 0.1% --- ============================================================== To contact the reporter on this story: Timothy R. Homan in Washington at thoman1@bloomberg.net

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