This is from Bloomberg news.
The question remains, will consumer spending pick up after the initial shock of the tax hikes and sequesters?
Or will growth continue to be low due to the reduced income from those pro active fiscal adjustments?
“The GDP report may also show consumer spending, which accounts for about 70 percent of the economy, grew at a 1.6 percent annualized rate, from April through June, according to the Bloomberg survey median. The prior quarter’s 2.6 percent pace was the strongest since the first three months of 2011.
Some of the slowdown in consumption may have been the lingering effect of the payroll tax, which reverted to its 2010 rate of 6.2 percent in January after holding at 4.2 percent for two years, resulting in lower take-home pay.
At the same time, gains in property values and share prices are lifting consumer confidence and helping households keep spending. A July 30 report from the Conference Board, a New York-based research group, will show its sentiment gauge in July was little changed from the five-year high reached in June.