WASHINGTON – The U.S. economy is emerging from hibernation after a bleak winter.
Consumers are ramping up spending, businesses are ordering more goods and manufacturers are expanding. The strengthening numbers show that harsh snowstorms and frigid cold in January and February were largely to blame for the economy’s scant growth at the start of the year.
Growth appears to be picking up as the weather improves, and economists think the government today will report a solid hiring gain in April exceeding 200,000 jobs.
Harsh winter weather deferred, delayed and displaced but did not destroy economic activity, said Diane Swonk, chief economist at Mesirow Financial.
Meager growth early this year did not reflect underlying demand, she said.
The economy barely expanded in the first quarter, eking out an annual growth rate of just 0.1 percent, compared with a 2.6 percent rate in the final three months of 2013. Americans spent more last quarter on utilities and health care, but their spending on goods barely rose.
One drag on the economy appears to be the faltering housing recovery.
Builders started work on fewer homes in March than they did a year earlier. Sales and construction may rebound later this year, but economists don’t expect housing to contribute much to growth.
Still, other data indicate that the economy was already rebounding in March and probably improved further in April. Auto sales jumped 8.5 percent in April compared with the same month a year ago, the best April sales increase in nine years.
Consumers spent more at furniture stores and other retail chains. Overall consumer spending soared 0.9 percent in March, the government said Thursday, the most in 4 1/2 years.
Economists watch consumer spending closely because it makes up about 70 percent of economic activity.
Consumer confidence has nearly returned to pre-recession levels, according to two surveys by the Conference Board and the University of Michigan. Americans are increasingly optimistic about economic growth and hiring.
Also Thursday, a private survey showed that manufacturing activity accelerated in April for a third straight month. The Institute for Supply Management said its manufacturing index rose to 54.9 in April from 53.7 in March. Any reading above 50 indicates expansion.