Still, the recurring political battles over the nation’s finances may be unsettling consumers. After reaching an eight- month high on Dec. 30, the weekly Bloomberg consumer comfort index has declined for two consecutive weeks.
The Jan. 1 end of the temporary payroll tax cut will dent take-home pay and thus consumption, economists say. The economy is expected to grow in the first quarter at an annual rate of 1.5 percent, according to the median forecast of economists surveyed by Bloomberg.
Unless the automatic spending cuts are postponed, “we’ll be doubling down on austerity at a time when the economy is already weak,” says Scott Anderson, chief economist of Bank of the West in San Francisco.
The poll of 921 Bloomberg customers has a margin of error of plus or minus 3.2 percentage points.