Economic Update 04/07/15

EMPLOYERS ADD JUST 126,000 JOBS IN MARCH

What led to this moderation in hiring, which snapped a yearlong streak of payrolls expanding by 200,000 or more per month? Are dollar strength and low oil prices now hampering corporate profits? Did the weather have an impact? Whatever the underlying causes, the Labor Department’s March report was a disappointment. The jobless rate remained at 5.5% last month, with the broader U-6 rate including the underemployed and those out of the labor force at 10.9%. The Labor Department revised January and February job gains down by a total of 69,000.

A NICE GAIN IN CONSUMER CONFIDENCE

The Conference Board’s respected monthly index rose to 101.3 for March, 2.5 points higher than its (revised) February reading. That contrasted with the forecast of analysts surveyed by Briefing.com, who saw it slipping to 96.4.

WAGES GROW 0.4% IN MARCH

Investors and economists welcomed this development, presented last week in the Commerce Department’s February personal spending report. Household spending increased an unimpressive 0.1% in February, but that was better than the 0.2% retreat that came with falling fuel prices in January.

TWO REAL ESTATE INDICATORS BEAT FORECASTS

January’s S&P/Case-Shiller Home Price Index showed an overall 4.6% annualized gain, and the National Association of Realtors announced a 3.1% rise in its pending home sales index for March. Analysts at Briefing.com projected a 4.5% yearly advance for the Case-Shiller and a 2.5% fall for home sale contracts.

S&P, DOW ADVANCE IN SHORT TRADING WEEK

Both indices posted the exact same 4-day gain of 0.30%. Wall Street was closed for Good Friday, and that delayed the possibility of a selloff linked to concerns over March hiring. The Nasdaq lost just 0.09% last week. Where did these indices settle Thursday? DJIA, 17,763.24; S&P, 2,066.96; NASDAQ, 4,886.94.

THIS WEEK: ISM releases its March service sector index Monday. Nothing major is slated for Tuesday. Earnings season begins Wednesday with announcements from Rite Aid, Family Dollar, Bed Bath & Beyond, WD-40, Pier 1 and Alcoa; the Federal Reserve will also publish minutes from its March policy meeting. Earnings from PriceSmart, Constellation Brands and Ruby Tuesday arrive Thursday, plus new initial jobless claims figures and data on February wholesale inventories. Friday, China issues its latest inflation reading.