Consumers to solidify the recovery

Consumers are out shopping in March, despite lower income and still grim job prospect. Confidence is getting back up.

Sales surged 1.6 percent, the Commerce Department said, up from February's revised 0.5 percent gain. Economists surveyed by Thomson Reuters had expected a gain of 1.2 percent.

The increases were across the board. Car dealers, home furnishing stores, building suppliers, sporting goods stores, clothing retailers and general merchandise stores all reported gains. Auto sales surged 6.7 percent, the department said, the most since last October.

I was wrong, the retail strength now looks quite solid.

JP Morgan reported great earnings today. Its nonperforming loans, those that are in default or close to being in default, totaled $2.7 billion, up $946 million from a year earlier but a $763 million improvement from the final three months of 2009.

"We continued to see delinquencies stabilize, and in some cases improve, in our credit portfolios," Dimon said. "Ultimately, the health of these portfolios will track the health of the economy."

The strong result is also telling me that I may have been too cautious about big banks.

Bernanke, testifying before Congress, said that consumers are spending again after having cut back sharply during the recession. Going forward, consumer spending should be helped by a gradual pick up in jobs, a slow recovery in household wealth from recent lows and some improvement in the ability to get loans.

High unemployment rate and low inflation, however will keep the Fed from raising the rate anytime soon.