What I Saw Last Week

U. S. Construction Spending rose by 0.8% in February. While this was below the 1.0% increase that I had anticipated, the headline disappointment was offset by an upward revision to January (from -1.0% to -0.4%).

Con Spend

On the private side, residential construction spending increased 1.8%, which more than offset a 0.3% decline in non-residential spending that was paced by a downturn in communication (-8.1%), transportation (-4.2%), health care (-2.2%), and manufacturing (-1.7%) spending.

Total construction spending is up 3.0% year-over-year. Private construction spending is up 6.9% year-over-year while public construction spending is down 8.0% year-over-year.

The key takeaway from the report is that increases were seen in both private construction spending (+0.8%) and public construction spending (+0.6%).

March Non-Farm Payrolls increased by 98,000 (I was expecting a more robust 155,000). Over the past three months, job gains have averaged 178,000 per month. February non-farm payrolls were revised down to 219,000 from 235,000 and January payrolls were also lowered to 216,000 from 238,000.


March private sector payrolls rose by 89,000. February private sector payrolls were revised down to 221,000 from 227,000 and January private sector payrolls were also revised down to 204,000 from 221,000.

Hiring in March was expected to drop after the monthly gains of more than 200,000 in the two previous months, but this was the weakest showing for the economy in nearly a year. Although it represents just one month’s data, it will raise questions about whether improving business sentiment is actually translating into any meaningful action by employers.

The March Unemployment Rate was 4.5% versus 4.7% in February and the labor force participation rate was steady at 63.0%.

U RAte

Persons unemployed for 27 weeks or more accounted for 23.3% of the unemployed versus 23.8% in February.

The U-6 unemployment rate, which accounts for both unemployed and underemployed workers, decreased to 8.9% from 9.2% in February.

The takeaway here is that the unemployment rate is now at its lowest level since May of 2007.

Consumer Credit  increased by $15.2 billion in February after increasing an upwardly revised $10.9 billion (from $8.8 billion) in January.


The growth in February was driven mostly by an increase in non-revolving credit, which was up $12.3 billion from January to $2.79 trillion.  Revolving credit increased by $3.0 billion to $1.00 trillion.

Consumer credit increased at a seasonally adjusted annual rate of 4.75% in February, with revolving credit increasing at an annual rate of 3.50% and non-revolving credit increasing at an annual rate of 5.25%.

What to Watch for This Week

Consumer Sentiment was measured at 96.9 in March and the early April figure is likely to pull back slightly to around 96.3 as proposed changes to federal policy get ham-strung in Congress.

U.S. Retail Sales rose by 0.1% in February and the March figure should show an about-face with a small 0.1% contraction.

Inflation, as measured by the Consumer Price Index, rose by 0.1% in February and the March report is likely to show no change.