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…
On Tuesday, the Commerce Department announced that retail sales rose 0.3% in April. This was in-line with economist expectations. March retail sales were revised up to a 0.8% gain, up from 0.6% previously estimated. Sales at gas stations rose 0.8% in April due to higher prices at the pump. Interestingly, sales at bars and restaurants posted their biggest drop in more than a year, so higher gasoline prices may be impacting consumer spending a bit. Overall, the retail sales report was positive, especially the March upward revision. Even so, economists are now worried about how higher gasoline prices will impact consumer behavior in the upcoming months.
New Housing Starts
On Wednesday, the Commerce Department announced that new housing starts declined by 3.7% in April to an annual pace of 1.29 million. This was down from the revised 1.34 million in March that was the strongest annual pace in 11 years. April housing starts was exactly in-line with economists’ consensus estimate, and the fact that April was the coldest in 20 years may have impacted housing starts. So far, higher mortgage rates have not derailed housing starts, but affordability issues may eventually emerge.
Leading Economic Index (LEI)
On Thursday, the Conference Board announced that its leading economic index (LEI) rose 0.4% in April. Eight of the 10 LEI components improved. Furthermore, the March LEI was revised up to a 0.4% increase, up from 0.3% previously estimated. In the past six months, the LEI has risen a robust 3.3%. Only building permits and stock prices were negative in April. These components are expected to be positive in May which bodes well for overall economic growth.
That’s all I have for you this week. I’ll be in touch again next week with the latest ratings out of Portfolio Grader.
Until next week,