KEY DATA: CPI: -0.4%; Non-Food and Energy: +0.1%/Philadelphia Fed: down 6.5 points
IN A NUTSHELL: "The slowdown in inflation is good news but the growing number of gloomy economic numbers is beginning to catch my attention."
KEY DATA: Starts: down 16.5%; Permits: up 14.3%/Jobless Claims: 360,000 (up 32,000)
IN A NUTSHELL: "With permits outstripping construction, look for a rebound in housing starts over the next few months."
KEY DATA: PPI: -0.7%; Excluding Food and Energy: +0.1%/IP: -0.5%; Manufacturing: -0.4%
IN A NUTSHELL: "With no pressure on wholesale costs, there is little reason to believe that consumer prices will be rising very much anytime soon, especially if the nation's manufacturing base doesn't see demand rise faster."
INDICATOR: April Import and Export Prices
KEY DATA: Imports: -0.5%; Nonfuel: -0.2%; Exports: -0.7%; Farm: -2.2%
IN A NUTSHELL: "With the price of imports basically going nowhere, consumer inflation should remain tame and that is good for both households and the Federal Reserve."
INDICATOR: April Employment Report/ISM Non-Manufacturing Survey
KEY DATA: Payrolls: 165,000; Private Sector: 176,000; Unemployment Rate: 7.5% (down 0.1 percentage point)/ISM (Non-Manufacturing): 53.1 (down 1.3 points)
IN A NUTSHELL: "A declining unemployment rate is great news but a softening service sector raises questions whether job gains can be strong enough to lower the rate further."
INDICATOR: March Trade Deficit
KEY DATA: Deficit: $38.8 billion ($4.8 billion narrower)
IN A NUTSHELL: "A surprisingly narrow March trade deficit could mean that first quarter growth was stronger than initially estimated."
INDICATOR: First Quarter Productivity/Jobless Claims/Layoff Notices
KEY DATA: Productivity: +0.7%; Labor Costs: +0.5%/Jobless Claims: 324,000 (down 16,000)/Layoffs: down 23%
IN A NUTSHELL: "The labor market data seem to be better than expected and that holds out hope that tomorrow's employment report could surprise on the upside."
In a Nutshell: "Nothing says it better than the Fed itself: Household spending and business fixed investment advanced, and the housing sector has strengthened further, but fiscal policy is restraining economic growth."
Rate Decision: Fed funds rate maintained at a range between 0% and 0.25%
I mentioned that the Fed's two-day meeting would end with a reaffirmation of its willingness to keep rates low as long as necessary and that is precisely what happened. But there were a couple of comments in the statement that will open eyes. First, in the description of economic conditions, the Committee noted that the private economy is pushing ahead but it is the government that is putting roadblocks in the way. That was as clear a shot at Congress as I have seen the Fed take.
KEY DATA: ISM (Manufacturing): down 0.6 point; Orders: up 1.9 points; Employment: down 4 points/ADP: up 119,000
IN A NUTSHELL: "Washington may not be able to stop the economic train in its track but it appears to be doing a good job slowing it down."
KEY DATA: Case-Shiller (20-City): 1.2%; Year-over-Year: 9.3%/Wages and Salaries (Year-over-Year): 1.6%
IN A NUTSHELL: "A sluggish economy may be holding back wage gains but it is not stopping the surge in housing prices."