A Short, But Important Economic Update

It’s Friday and that means it’s time to review the latest economic data and identify which pockets of the economy are heating up and which are slowing down. Don’t worry about catching every headline and every report throughout the week; I recap all of the most important news impacting your wealth right here every Friday. Let’s take a look at this week’s big headlines:

Consumer Credit: Buying This, Not That

U.S. consumer credit increased by $15.5 billion in February, and January’s figured was revised down to a $10.8 billion gain. Economists were looking for a $12.5 billion increase. If you are not familiar, consumer credit is broken down into three categories: auto, revolving (credit card) and other debt (student loans, etc.). Much of February’s increase can be attributed to non-revolving debt, which gained $19.2 billion. Revolving debt fell by $3.7 billion in February. What this report shows is that U.S. consumers remain cautious when it comes to taking on too much debt as the U.S. economy slowly recovers; yet, they are willing to take out loans for automobiles and education.

Cooling, But Still Improving: Initial Claims for Unemployment

For the week ending April 4, initial claims for unemployment increased by 14,000 to 281,000, which was slightly above economists’ expectations for 280,000. The previous week was revised down by 1,000 to 267,000 claims. The four-week moving average slipped to 282,250.Despite the increase last week, jobless claims in the past four weeks have averaged 282,500 per week, which is the lowest level in 15 years. So even though hiring may have cooled a bit in March, the job market continues to slowly improve.

No Ice Melt to be Found, But Inventories on Other Items Rise

Wholesale inventories increased 0.3% in February, outpacing economists’ expectations for a 0.2% gain. January’s figure was revised from a 0.3% gain up to 0.4%. At the February sales pace, it would take 1.29 months for wholesales to use their entire inventory, which is the same pace as January. These figures show that wholesalers struggled to move products off their shelves in February, likely a result of cold temperatures and winter weather throughout much of the U.S. So while there may not be any ice melt left on the shelves, many other things are in supply. The numbers also suggests that wholesalers may have little incentive to restock warehouses in the near term.

That’s all I have for you this week. I’ll be in touch with the latest Portfolio Grader changes on Monday.

Have a great weekend,

Louis Navellier

Louis Navellier

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