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Is the Easter Bunny bummed?

By Mark Hamrick ·
Monday, April 14, 2014
Posted: 6 am ET

With readings on retail sales and the housing market due this week, we'll be focusing on two critically important segments of the economy. Meanwhile, an important holiday approaches for retailers: Easter. Amid hopes that people have emerged from their winter-inspired hibernation across much of the country, we'll see whether they're buying.

At the same time, we'll hear about new-home construction and building plans in March.

The calendar

Here's what we have on tap this week:

  • The Commerce Department reports on March retail sales, Monday at 8:30 a.m. (all times Eastern).
  • The Labor Department reports on the March Consumer Price Index, Tuesday at 8:30 a.m.
  • The Commerce Department releases March housing starts/building permits, Wednesday at 8:30 a.m.
  • The Federal Reserve's Beige Book economic roundup is released, Wednesday at 2 p.m.

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Food and gas prices: Why so high?

It's costing more and more to put food on the table and fuel in the tank. Hear whether any relief is on the way.


We can get it for you: Retail

There was a bit of preview of the government's reading on retail sales as the major store chains released their monthly sales numbers last week. Those individual reports are subsequently compiled by the International Council of Shopping Centers, which said sales were up 3.6 percent from a year earlier.

The trade group's economist, Michael Niemira, says, "It paints a picture that March (consumer) demand was stronger than it was in February."

Niemira's own expectations for sales growth this year are on the conservative side. As he puts it: "I'm not a believer that we're on a path to 3 percent or more growth, even into next year."

What's holding back the consumer? The negative factors include frustratingly slow improvement in both employment and incomes, Niemira says. In other words, more people need to be working and making more money for retailers to see substantial improvement at their registers.

Buying any chocolate bunnies?

With Easter just days away, the National Retail Federation says consumers will be shopping a bit less for the holiday this year.

The trade group surveyed about 6,400 Americans and found they plan to spend about 5 percent less than last year on Easter meals, clothing, gifts, candy and other items. The survey also found fewer Americans are planning to celebrate Easter.

Sounds like the Easter Bunny needs to get a new public relations person.

Breaking ground on homes

Attention turns to construction on new homes this week, with the National Association of Home Builders releasing its builder sentiment survey. That comes a day before the government's report on housing starts -- or new-home construction and building permits, a gauge of future activity.

Housing suffered a bit over the winter months, and weather was deemed the key culprit.

The first quarter of the year "was extremely disappointing relative to where we expected to be at the beginning of the year," says David Crowe, chief economist for the homebuilders association. He says the March numbers should provide a better idea of whether the slowdown in January and February was primarily weather-related.

What else is hurting housing?

Factors other than weather are troubling the housing market, too.

"The most difficult one is tight credit," Crowe says. He blames the combination of rising mortgage rates and tougher underwriting standards, prompted by the Dodd-Frank financial reform regulation.

Another problem for the housing sector is slower job growth in recent months. As a kind of rising or falling tide for the economy, the job market's health has an inevitable impact on just about all of us -- perhaps even including the Easter Bunny.

Business history: Rev your engines

On April 17, 1964, Ford introduced the Mustang in North America at the New York World's Fair. Back then, the price began at a little over $2,300. Today, a new Mustang will cost you about 10 times that amount, with suggested retail prices beginning at about $22,500.

Incidentally, just to compare, we plugged that 1964 price into the inflation calculator and found that it would translate to about $17,400 today. So, the cost of a "pony" has risen a bit more than inflation overall.

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