Analysts expect U.S. economy to rebound despite sluggish first-quarter growth

Thanks to a bounce-back in U.S. consumer spending, business investment and job growth, analysts foresee a strengthening economy through the rest of the year.
By MARTIN CRUTSINGER, Associated Press Published: April 30, 2014
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State and local governments, which have benefited from a rebound in tax revenue, are hiring again as well.

A survey by the private Conference Board released Tuesday found that while U.S. consumer confidence dipped this month, many people foresee a strengthening economy in the months ahead.

Growth in jobs

Joel Naroff, chief economist at Naroff Economic Advisors, said he expects job growth to average above 200,000 a month for the rest of the year — starting with the April jobs report, which will be released Friday.

“Those are the types of job gains which will generate incomes and consumer confidence going forward,” Naroff said.

Naroff said solid job growth should lead consumers, who drive about 70 percent of the U.S. economy, to boost spending. He expects pent-up demand from purchases that were put off during the harsh winter to power a burst of growth in the April-June quarter. He thinks annual growth for the quarter will reach a vigorous 4.3 percent.

“If you take good income growth and pent-up demand and put them together, you get good consumer spending, and that spills over into the rest of the economy,” Naroff said.

Economists are expressing optimism even though one key sector, housing, has slowed. Home sales have been depressed in recent months by severe weather, higher prices and a shortage of available houses.

Yet even in this area, there was hopeful news this week: More Americans signed contracts to buy homes in March, the National Association of Realtors said.