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Much of the recent economic data we've seen has looked better than expected. And the stock market has seen a string of new record highs.
This week's economic updates may prove to be less inspiring, with key reports due on retail sales and inflation.
Consumers have a pulse
On Tuesday, the Commerce Department releases the February retail sales report, scheduled at 8:30 a.m. (all times Eastern). Between a positive (the modest pickup in wages seen in Friday's employment report) and a negative (the big jump in gasoline prices), economists expect the report to show only a slight increase.
Says Nigel Gault, chief economist with IHS Global Insight, "I think the consumer's doing OK, not great." He notes that consumers have been negatively affected by the expiration of the payroll tax cut, which took effect at the beginning of the year and have also been slammed by rising prices at the gasoline pump.
Inflation readings
Experts say inflation is looking restrained if you can stare past the increase in gasoline prices. So-called core inflation, the measure watched most closely by economists and the Federal Reserve, has been largely contained lately. The core gauge excludes energy and food costs.
At 8:30 a.m. Thursday, the Labor Department releases the Producer Price Index. This is the gauge of prices at the wholesale level. The Consumer Price Index, which measures prices at the retail level, follows at 8:30 a.m. Friday.
Comforted by the longer-term trend, John Silvia, chief economist for Wells Fargo Securities, says, "I think inflation is still 1.5 (percent) to 2 percent as far as the CPI goes." Indeed, officials with the Federal Reserve have said inflation has remained remarkably low.
Punched at the pump
Jeffrey Rosen, chief economist at Briefing.com, says that, by his calculation, gasoline prices were up about 14 percent for the month covered by the upcoming CPI report. Including gasoline, retail sales were probably up about 0.2 percent to 0.3 percent in February, Rosen says.
"My main concern is basically what's going to happen with the savings rate in February," he says. He says consumers dipped into savings in January to help fund their purchases. He says if consumers felt like they wanted to replenish savings in February, that could have dampened retail sales.
Better gas prices later?
Economists say a big part of the recent spike in gasoline prices has involved temporary supply bottlenecks, including refinery shutdowns. Some of those gains could begin to be reversed soon. Gault says crude oil prices are beginning to fall. He looks for the decline to continue and to help send down prices paid by drivers at the gasoline pump.
This week in business history
On March 13, 1933, the nation was caught in the grip of the Great Depression. On that day, the nation's banks began to reopen after President Franklin Roosevelt had required a so-called bank holiday. It was the beginning of a recovery for the banking system, when depositors began to return their money to banks. The previous month had seen a devastating run on the banks.
