On a positive note, construction of new homes rebounded in March after a drop in February. Housing starts picked up 2%, reaching an annual rate of 926,000. However, permits for new construction dropped 5.7% to an annual rate of 1.04 million units.
Consumer confidence improved this month, reaching the second-highest level since 2007. The University of Michigan’s consumer sentiment survey climbed to 95.9 as consumers were more upbeat about their current financial situations and about the economy.
Inflation is firming up a bit, as consumer prices ticked up in March for a second month in a row. US consumer prices rose .2%, led by higher gasoline prices, which rose 3.9% – marking the biggest increase since February 2013.
In negative news, industrial production slipped .6% in March, marking the biggest decline since August 2012. March’s decline lead to a 1% quarterly drop – the first quarterly decline for production since the end of the recession.
In other negative news, small business optimism slumped last month to the lowest in 9 months. The NFIB optimism index fell to its worst reading since last June, with all ten components slipping. “It is no surprise that optimism is muted and owners’ expectations about the future are less than exuberant. Small business owners are not encouraged to expand their businesses when consumer spending is down, US trading partners are weakening and the government continues to try and micromanage the private sector with red tape and regulations. Overall the economy will keep moving forward, but more like a turtle than a hare”, according to the NFIB.
Business inventories rose .3% in February, while sales were flat after dropping 2.3% the month prior. The inventory-to-sales ratio was unchanged at 1.36.