Last week’s Producer pricing index was up 1.1%. However, the core index which excludes fuel and food was up only .1%. Retail sales also were higher than expected mostly due to new car purchases. We now await Wednesday’s Consumer Pricing Index report. Higher prices along with last week’s reports would increase inflationary fears, even though the minutes from the Fed meeting seemed to soften the drumbeat on inflation. The Fed still is concerned about the rate of economic growth.
The housing slump continues and we do expect a bottom over the next six months barring any more negative news from this sector. A recession seems to be firmly on the back-burner for now based on economic results from the Fed rate cut, other economic indicators and the fact that the American consumer never fails to disappoint with his/her penchant for spending. Thank you for the opportunity to serve you and your clients.