NEW YORK (3/12/13)--The U.S. economy is set to gain momentum later his year because consumers and businesses are not being sidetracked by higher payroll taxes and cuts in federal spending, Bloomberg said Monday.
U.S. consumers are spending more on new automobile purchases and saving less, while rising home values are increasing household net worth, and stock indexes rise to record highs, Bloomberg said.
In February, companies added 246,000 workers to private payrolls, expanded investment and restocked inventories--putting profits garnered during the recovery to use, Bloomberg said.
A lot of factors are flowing in the right direction, Brian Jones, a senior U.S., economist at Societe Generale in New York, told the publication.
To some extent, the effects of higher taxes are being neutralized by higher demand at businesses, which is putting more people to work, who are then spending more money, Jones explained.
In the second half of the year, as effects from federal budget cuts fade, growth will pick up steam and lead to even more robust spending by consumers and businesses, according to projections from financial firms such as Barclays and JPMorgan Chase & Co, Bloomberg said.