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Bought a snow shovel lately?

By Mark Hamrick ·
Monday, March 10, 2014
Posted: 6 am ET

This week's economic reports amount to a three-alarm blaze, on a scale of 1 to 5.  After last week's Beige Book and the February jobs report, this collection isn't quite so sizzling. Even so, an update on consumer spending is always important.

Sales, prices, sentiment and 'Jolts'

Here's what we have scheduled this week:

  • The Labor Department releases its Job Openings and Labor Turnover Survey, also known as Jolts,  Tuesday at 10 a.m. (all times Eastern).
  • The Commerce Department releases February retail sales Thursday at 8:30 a.m.
  • The Labor Department releases the February producer price index Friday at 8:30 a.m.
  • The University of Michigan consumer sentiment survey is released Friday at 9:55 a.m.

The center of gravity for the U.S. is consumer spending. So, the reading on February retail sales is the star performer of the week. We know that much of the economic activity has been dampened by severe winter weather. And that raises a dilemma here: How much importance do you attach to these reports when weakness is blamed on wintriness?

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Purchases on ice

Some recent spending has been done out of necessity, such as purchases of snow shovels, ice melting material or winter clothing and boots. But when it's been particularly bad outside, consumers have been hibernating -- curbing purchases of spring/summer clothing and new cars.

Kathy Grannis, a spokeswoman for the National Retail Federation, says it is likely many of those purchases have simply been delayed. "There is no reason to believe that consumers aren't going to come back in the spring. You know we’re not hearing any reports of economic conditions that would lead you to believe that consumer sentiment, or anything like that, is completely troubling," says Grannis.

Some experts worried

Not all economists are in the "blame it all on weather" camp. They note that the economy initially appeared to have strong momentum in place in the final quarter of last year, before winter tightened its grip. But growth for that period has since been revised lower. One source of drag right now is that business inventories are being drawn down to match actual demand.

Those more skeptical about the economy include Jeffrey Rosen, chief economist for "All the economic numbers have been sliding, which is what happened over the last few years during this point in the calendar year," he says. "Strong growth in the second half of the year was not carried over into the next year." At any rate, it will likely be weeks or months before we have a better sense whether it was just the weather or if the economy has bigger problems.

Ahead to the Fed

The week's economic reports serve as a kind of prelude to the next meeting of the Federal Reserve. The first policy-setting meeting with Janet Yellen at the helm is scheduled for March 18-19. She has said that soft economic reports are likely because of bad weather, but she conceded that we won't be certain until the coming months.

This week in business history

On March 13, 1991, the Justice Department announced that oil giant Exxon had agreed to pay $1 billion for cleaning up Alaska's Exxon Valdez oil spill. The spill took place in March 1989 off Prince William Sound, Alaska. It is still considered one of the worst environmental disasters in modern history.

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