Flea market and swap meet vendors will be encountering more optimistic shoppers with bulging wallets, according to the latest economic news. A newly resilient economy is poised to expand this year at its fastest pace since 2003, thanks in part to brisk spending by consumers and businesses, according to a survey of 51 economists polled by the Wall Street Journal.
Many economists ratcheted up their growth forecasts because of recent reports suggesting a greater willingness to spend. “We’re in a lot different place from last year,” says Goldman Sachs’s Jan Hatzius, who last year was one of the most bearish economists on Wall Street, but now is among the most optimistic on growth.
The economists polled expect gross domestic product will be 3.5 percent higher in the fourth quarter of 2011 than a year earlier, up from the 3.3 percent increase they projected in last month’s survey, which would be the largest increase since 2003. They look for GDP to expand at a 3.6 percent annual rate in the current quarter, accelerating from the 3.2 percent rate recorded in the final months of 2010.
In related good news, confidence among U.S. consumers rose in February to the highest level in three years as Americans became more optimistic about their incomes and the economy, the Conference Board reported yesterday. The Board’s index of sentiment increased to 70.4, the highest since February 2008, from 64.8 the prior month, figures from the New York-based private research group show. Economists had projected the gauge would be little changed at 65.5, according to the median forecast in a Bloomberg News survey.
A pickup in optimism and job gains may encourage Americans to increase purchases, boosting consumer spending, which is the biggest part of the U.S. economy. Still, an ongoing unemployment rate of 9 percent or more and mounting home foreclosures threaten to restrain the exuberance.