SUBDUED INFLATION IN APRIL
Consumer and producer prices retreated last month. The federal government’s Consumer Price Index fell 0.4%, a monthly descent unseen since December 2008; the Producer Price Index declined 0.7%, its biggest monthly drop in three years.
HOW IS THIS EARNINGS SEASON TURNING OUT?
At the closing bell on May 10, 90% of S&P 500 firms had reported quarterly results. According to Reuters, 67% of them have surpassed earnings forecasts and 24% have fallen short of projections. Should the remaining 50 components report results matching estimates, earnings will be up 5.3% on last year.
Q1 GDP COMES IN AT 2.5%
The initial estimate of first quarter growth from the Bureau of Economic Analysis disappointed some analysts who had expected 3% expansion or better.
Consumer prices retreated 0.2% in March as fuel costs fell, a sea change from the 0.7% rise in the Consumer Price Index seen in February.
HOUSEHOLDS BOUGHT LESS LAST MONTH
Retail sales were down 0.4% in March, according to the Commerce Department. This unanticipated dip was the deepest retreat in nine months. Even with volatile car and truck sales factored out, the March decline remained 0.4%.1
THE QUARTER IN BRIEF
Wall Street’s bulls figured stocks were ready for a breakout in 2013, and that is exactly what happened in the first quarter. The Dow finished March at 14,578.54, its highest close ever. The S&P 500 ended the quarter with a record close: 1,569.19.
JUST 88,000 NEW JOBS?
In the wake of the Labor Department’s disappointing March employment report, puzzled analysts tried to figure out the reasons for such poor job growth. Did businesses fear the impact of the federal budget cuts in March and scale back hiring?
SOLID GAINS IN HOUSEHOLD SPENDING, INCOME
According to the latest Commerce Department report, household spending was up 0.7% in February (the largest gain in five months) while consumer incomes jumped 1.1%. February’s 35-cent climb in gasoline prices influenced the first number, while an 11.9% surge in dividends influenced the second.
WINTER DOESN’T DETER HOMEBUYERS
According to the National Association of Realtors, existing home sales rose 0.8% in February. The sales pace hit 4.98 million units, a 39-month high. The inventory of homes for sale increased 9.6% last month, recovering from a six-and-a-half-year low reached the month before.
RETAILERS RECEIVE A MAJOR BOOST
Higher payroll taxes don’t seem to have hurt shopping or driving: the Commerce Department noted a 1.1% improvement in retail sales for February.