Economic Update 04/21/14

CONSUMER PRICES ADVANCE 0.2%

In reviewing March’s mild increase in household inflation, two statistics stand out. The Consumer Price Index measured a 2.7% year-over-year rise in shelter costs (the largest annual gain in six years). Americans also paid 0.4% for food last month. Annualized consumer inflation reached 1.5% in March, up from 1.1% for February.

MARCH PUTS HOUSEHOLDS IN A BUYING MOOD

Retail sales rose 1.1% last month, bettering the (revised) 0.7% advance in February. Census Bureau data showed core retail sales (minus auto buying) up 0.7% for March; they increased 0.3% a month earlier.

FACTORIES & BUILDERS GROW BUSIER  

According to Federal Reserve data, March was another solid month for industrial output – production rose 0.7%, and the Fed revised the February advance to 1.2%. Groundbreaking by builders increased 2.8% in March, though the Census Bureau also measured a 2.4% decline in building permits.

BULLS RUN AGAIN

Stocks got a lift last week as the pace of China’s economic growth topped forecasts and Fed chair Janet Yellen stated that the central bank has a “continuing commitment” to supporting the economy. The weekly gains: NASDAQ, 2.39% to 4,095.52; Dow, 2.37% to 16,408.54; S&P 500, 2.71% to 1,864.85.

THIS WEEK: On Monday, earnings roll in from Kimberly-Clark, Netflix and Hasbro and the Conference Board’s March LEI also appears. Tuesday brings March existing home sales figures, the April FHFA home price index and earnings from Bank of NY Mellon, Amgen, Harley-Davidson, Comcast, McDonald’s, Travelers, Xerox, AT&T, Discover Financial, Yum Brands, Lockheed Martin and Lexmark. March new home sales numbers are out Wednesday, plus quarterly results from Dow Chemical, Owens Corning, Boeing, Procter & Gamble, Facebook, Ericsson, Northrop Grumman, TD Ameritrade, Ingersoll-Rand, E*Trade, Zynga, Texas Instruments, Snapple, Delta Airlines, Raymond James, Safeway and Qualcomm. Thursday, earnings from Broadcom, Under Armour, Starbucks, Jet Blue, Altria, General Motors, Starwood, Microsoft, Amazon.com, Caterpillar, Verizon, 3M, UPS, T. Rowe Price, Novartis, PulteGroup, Raytheon, AstraZeneca, Occidental Petroleum, Eli Lilly, Dunkin Brands, DR Horton and Pandora arrive plus data on March hard goods orders and a new initial claims report. Friday, the University of Michigan’s final April consumer sentiment index comes out, plus earnings from State Street, Colgate-Palmolive, Ford, Goodyear, Honda, Weyerhaeuser and Tyco.