CONSUMERS BOUGHT MORE IN MARCH According to a report from the Department of Commerce, retail sales jumped 0.6% last month. That was the biggest monthly gain recorded since November (and the first monthly advance of 2018). Sales of cars and trucks were up 2.0%, making March the best month for that category since September.1  CONSTRUCTION ACTIVITY INCREASES New Census Bureau data shows housing starts improved 1.9% in March; also, building permits rose 2.5%. In February, permits fell 4.1% and starts declined 3.3%.2     INDUSTRIAL OUTPUT RISES 0.5% This March gain reported by the Federal Reserve followed a (revised) 1.0% advance

CONSUMER SENTIMENT INDEX DESCENDS SLIGHTLY In its initial April edition, the University of Michigan’s survey of household sentiment saw its index decline to 97.8 from its final March reading of 101.4. The survey’s chief economist, Richard Curtin, believed that “uncertainty surrounding the evolving [U.S.] trade policy” affected the reading, but he added that “confidence still remains relatively high.”1   A SURPRISE RETREAT FOR THE HEADLINE CPI Economists polled by Briefing.com assumed the Consumer Price Index would rise 0.1% in March. Instead, it fell by that amount, largely due to a dip in gasoline costs. Core consumer inflation increased 0.2% and matched

HIRING WEAKENED IN MARCH Payrolls expanded by only 103,000 net new jobs last month, according to the latest employment report from the Department of Labor. Some economists wondered if harsh weather distorted the number (job growth was also poor in March 2015 and March 2017). The main jobless rate stayed at 4.1%; the broader U-6 rate, counting the underemployed, fell 0.2% to 8.0%, an 11-year low. Yearly wage growth was at 2.7%. Lastly, February’s huge net job gain was revised up by 13,000 to 326,000.1     TRADE TENSIONS PERSIST Thursday night, the Trump administration announced the possibility of $100 billion

HAS CONSUMER SPENDING MAINTAINED ITS PACE? A new Department of Commerce report states that consumer spending rose 0.2% in February as consumer incomes improved 0.4%. These numbers replicated January’s gains. Even so, the personal savings rate hit a 6-month peak of 3.4% in February, suggesting that spending may have leveled off in the first quarter. Newly revised data shows that the economy was very healthy in the fourth quarter. Real consumer spending (personal spending adjusted for inflation) increased 4.0% while Gross domestic product expanded at a 2.9% annual rate. (The previous Q4 GDP estimate was 2.5%.)1,2     STILL PLENTY OF

TRADE WAR POSSIBILITY WEIGHS ON STOCKS Last week, the U.S. imposed excise taxes on steel and aluminum imported from select countries and announced that up to $60 billion of Chinese imports would also soon face tariffs. These protectionist moves weakened bullish sentiment on Wall Street. The S&P 500 fell steadily Thursday and Friday and had its worst week since 2016, slipping 5.95% to 2,588.26; the Dow Industrials sank 5.67% on the week to 23,533.20. The Nasdaq Composite settled at 6,992.67, down 6.54% for the week.1,2   FED MAKES ITS FIRST INTEREST RATE MOVE OF 2018 After Federal Reserve officials voted to

PRICE GAINS EASE There was no half-percent spike in inflation in February. In contrast to January’s big jump, the headline Consumer Price Index rose 0.2% in the second month of 2018, with the core CPI following suit; the year-over-year CPI gain ticked slightly higher to 2.2%. The headline and core Producer Price Index also increased 0.2% last month; yearly wholesale inflation rose just 0.1% to 2.8%.1      THE CONSUMER IS CONFIDENT Displaying a preliminary March reading of 102.0, the University of Michigan’s consumer sentiment index reached a 14-year peak last week. Analysts polled by Reuters expected the gauge to decline

FEBRUARY SAW A HIRING SURGE Payroll growth was truly impressive last month. According to the latest Department of Labor report, employers added 313,000 net new jobs, including 61,000 in the construction industry; economists polled by Reuters projected a total February gain of 200,000. With the labor force participation rate reaching a 6-month high, the headline jobless rate stayed at 4.1% and the broader U-6 rate at 8.2%. Yearly wage growth declined to 2.6%.1  SERVICE BUSINESSES ARE THRIVING The Institute for Supply Management’s February snapshot of service industry growth was quite positive. ISM’s non-manufacturing purchasing manager index did wane slightly, losing

CB: PLENTY OF CONFIDENCE IN THE ECONOMY The Conference Board’s monthly consumer confidence index soared to 130.8 in February – the highest reading seen since November 2000. In January, the gauge was at 124.3. (In the middle of the Great Recession, the index hovered near 25.)1  SOLID READINGS ON SOME KEY INDICATORS Further fundamental economic data released last week looked strong. Personal incomes improved 0.4% in January, according to the Bureau of Economic Analysis; that matched the December increase. Personal spending advanced 0.2% last month. The Institute for Supply Management’s manufacturing purchasing manager index reached 60.8 in February, up 1.7

FEWER HOMES ARE SELLING Demand is high, prices are high, and inventory is slim. In view of these factors, the 4.8% year-over-year fall for existing home sales just reported by the National Association of Realtors is not surprising. It represents the largest annual decline seen since August 2014. Other January NAR data showed homebuying down 3.2% from December levels and a median sale price of $240,500, up 5.8% in 12 months.1    FED MINUTES EMPHASIZE THE “GRADUAL” Minutes from the January Federal Open Market Committee meeting appeared Wednesday, and while FOMC members saw “substantial underlying economic momentum,” they also stated

WALL STREET SEES ITS FIRST CORRECTION SINCE 2016 On Friday, the S&P 500 settled at 2,619.55, down 5.16% for the week. Thursday, it entered correction territory just nine days after its January 26 record close. The Dow Jones Industrial Average made even bigger headlines last week by taking two 1,000-point drops within four days, the second occurring Thursday.1,2 Last Monday, U.S. equities took their largest single-session fall in more than six years as higher interest rates for bonds and inflation concerns strengthened selling pressure. To add to the anxiety, two of the financial industry’s top ‘roboadvisor’ websites crashed during Monday’s

WAGE GROWTH PICKS UP AT LAST In January, average hourly pay was 2.9% higher than it was a year earlier. That was the key takeaway from the Department of Labor’s latest jobs report, which noted the addition of 200,000 net new workers last month. In January, the headline unemployment rate stayed at 4.1%; the broader U-6 rate, which counts the underemployed, ticked up to 8.2%.1   ISM: FACTORY SECTOR IN GREAT SHAPE The Institute for Supply Management released its January purchasing manager index for the manufacturing industry last week, and the reading of 59.1 surpassed the forecast, made by economists surveyed

THE ECONOMY EXPANDED 2.6% in Q4 The Department of Commerce’s first estimate of fourth-quarter gross domestic product was 0.6% below the Q3 number, but still well above the 2.1% rate the nation has averaged in the recovery from the Great Recession. America saw 2.3% economic growth in 2017, according to the report.1   HOME SALES RETREATED DURING THE HOLIDAYS Winter chill possibly encouraged the decline as much as high prices and low inventory. The National Association of Realtors noted a 3.6% slump in resales in December, while the Census Bureau said that new home purchases fell 9.3% last month. Existing home

CONSUMER SENTIMENT READING COOLS The initial January University of Michigan consumer sentiment index came in at 94.4 last week, 1.5 points beneath its final reading of 2017 and 4.1 points under its level of one year ago. Without prompting, 34% of respondents to the latest UMich survey brought up the subject of the recent federal tax reforms; 70% of them felt the reforms would have a positive effect on their lives; 18%, a negative effect.1    WINTER WEAKENS HOUSING STARTS New Census Bureau data shows groundbreaking decreased 8.2% in December after a (revised) 3.0% November gain. Building permits ticked down

RETAIL SALES ROSE IN DECEMBER Consumers spent freely during the holidays: the latest Census Bureau report shows a nice advance for retail purchases. They improved 0.4% last month, with core retail sales up by the same amount.1    PRODUCER PRICES UNEXPECTEDLY RETREAT In December, wholesale inflation declined for the first time in 18 months. Even with that 0.1% dip, the Producer Price Index advanced 2.6% for 2017, compared with 1.7% in 2016. Households contended with 2.1% inflation during 2017 according to the Consumer Price Index, which ticked up 0.1% last month. Core consumer prices rose 0.3% in December, so the

LOW UNEMPLOYMENT, BUT LESS HIRING The Department of Labor’s latest jobs report announced a headline unemployment rate of only 4.1% in December, but it also showed companies adding just 148,000 net new workers last month. Even so, net payroll growth averaged 204,000 during the last three months. In hiring terms, the health care sector grew more than any other industry in 2017, expanding by 300,000 jobs. Wages rose 2.5% last year. The broader U-6 jobless rate, encompassing the underemployed, ticked up a tenth of a point to 8.1%, which was still half a percent below its level of a year

CONSUMER CONFIDENCE DECLINES In December, the Conference Board’s monthly index fell sharply from its lofty November reading of 128.6. That number was a 17-year high. Economists polled by Bloomberg expected a retreat to 128.0; instead, the gauge dropped to 122.1, which was still one of its best readings in the past 15 years. Lynn Franco, the Conference Board’s director of economic indicators, noted that consumer expectations remain at “historically strong levels, suggesting economic growth will continue well into 2018.”1   OIL ENDS 2017 ABOVE $60 The yearlong comeback of light sweet crude culminated in a December 29 NYMEX close of $60.42,

FED MAKES ITS FINAL RATE MOVE OF 2017 As expected, the Federal Reserve raised the benchmark interest rate by 0.25% last week. The Federal Open Market Committee voted 7-2 to take the target range for the federal funds rate up to 1.25-1.5%. Fed officials made little change to their dot-plot chart – they still see three rate hikes in 2018, and their consensus projection has the federal funds rate at 2.1% a year from now. They did elevate their 2018 GDP forecast from 2.1% to 2.5%.1    CORE INFLATION LAGS HEADLINE CPI ADVANCE According to the Department of Labor, consumer

CONSUMERS ACT ON THEIR CONFIDENCE A new factoid points out just how well the economy is doing: the federal government just upgraded its estimate of third-quarter growth to 3.3%. New data on consumer spending and confidence hints at fourth-quarter strength. Personal spending improved 0.3% in October following the 0.9% leap in September, and household wages were up 0.4% in October for a second straight month. At a mark of 129.5, the Conference Board’s consumer confidence index reached a YTD peak in November, having soared 9.1 points in two months.1,2   TWO VERY POSITIVE HOUSING SIGNALS New homes are selling strongly. October

CONSUMER SENTIMENT DECLINES FOR NOVEMBER The University of Michigan’s monthly gauge of how households perceive current and future economic conditions ended the month at a mark of 98.5. Compared to the 100.7 final October reading, this was a disappointment. Still, the index was up 5.0 points year-over-year. Richard Curtin, the economist in charge of the consumer survey, noted that the index has hovered near “the highest levels since 2004” since January.1    HOME BUYING GETS A FALL BOOST Existing home sales rose 2.0% in October, surpassing the consensus 0.7% gain forecast by analysts polled by Investing.com. Elsewhere in its latest

HIRING REBOUNDS, INDUSTRIES EXPAND According to the Department of Labor, October brought a net gain of 261,000 jobs. (Last month’s net loss of 33,000 was revised to a net gain of 18,000.) The headline unemployment rate ticked down to 4.1%, while the broader U-6 rate fell to 7.9% (down 1.3% in 12 months). Wages were up 2.4% year-over-year. The Institute for Supply Management’s purchasing manager indices alternately rose and fell in October. The readings were strong: 58.7 for the factory PMI (down 2.1 points), 60.1 for the service sector PMI (up 0.3 points).1,2 CONSUMER SPENDING, CONFIDENCE IMPRESS Personal spending rose