Disturbing jobless-claims data, mixed retail-sales figures, and uninspiring housing numbers all combined to deliver a mixed-to-negative picture of the economy this past week. That makes it the third straight week economic indicators have been mostly on the negative side.
Despite these data, pointing to a definite lull following the strong indicators that the U.S. economy was in recovery mode earlier in the year, economists and other market-watchers are not yet panicking.
Joshua Feinman, global chief economist for Deutsche Bank Advisors, explained the current weakness is being seen as part of what he terms the stop-go recovery where things are erratically getting better: one step forward, two steps back.
Feinman noted, We are still feeling the headwinds from the housing and credit bubble and all the other factors that contributed to the financial crisis.
The result has been a stumbling economic pickup. Feinman said, [H]ouseholds have made progress ... [but] we're not where we were back in 08-09 ... we haven't completed all the repair work, if you will.
Other economists seemed to agree with that assessment this week. In a note to clients, Diane Schumaker-Krieg, global head of research and economics at Wells Fargo Securities, wrote that, in spite of recent disappointing indicators, the underlying trend still reflects an economy that is growing at a modest pace.
Here's a look at how specific sectors of the economy fared in reports this week:
Industry. The Federal Reserve banks in New York and Philadelphia both released reports indicating that manufacturing in their areas is growing at a slow, steady pace this month. However, that pace is markedly down from the growth seen in previous months, and it missed economists' consensus estimates in both cases. The reports had glass half-full or glass half-empty feels to them. They showed increases in employment and inventories outpacing new orders, a fact that indicates manufacturers are optimistic overall, but also suggests a reversal in the manufacturing revival under way could occur swiftly. Similarly, industrial-production statistics showed growth paused in March, and they would have been negative had it not been for sales of motor vehicles.
Housing. A bothersome trio of housing reports appeared to trouble investors on Wall Street very little. A report tallying sales of existing homes in March came in under expected figures, a worrisome sign. Mortgage applications for purchases, as counted by the Mortgage Bankers Association, declined from week to week. And the monthly National Association of Home Builders housing market index unexpectedly fell for the first time in eight months.
Consumer confidence. It appears most people are still riding high from the significant gains in employment seen at the end of last year and at the beginning of this year. An increasingly influential measure of consumer confidence calculated by financial-data-services company Bloomberg climbed to levels not seen since January 2008, before the worst of the global financial crisis began to hurt consumers' pocketbooks. Those gains in confidence are skewed toward more positive assessments of current personal financial conditions.Consumers' view of the economy and their willingness to spend did not follow the same positive trend in the Bloomberg survey, a finding that might have something to do with the fact employment growth has suddenly slumped and retail sales are down considerably from recent spikes.