Weekly Market Outlook – Stuck In The Middle With You

Housing Starts and Building Permits Charts

Source: Thomson Reuters

The big Kahuna was February's jobs report on Friday, which if nothing else was strange and should be taken with a grain of salt.

Last month, the economy only added 20,000 new jobs, falling well short of estimates of around 180,000. But, there's little doubt that the shutdown was the key driver of that slowdown. Even then though, January's payroll growth figure was revised upward, from 304,000 to 311,000... both of which were incredible numbers, suggesting that workers displaced by the shutdown had no trouble finding a new position.

Payroll Growth and Unemployment Rate Charts

Source: Thomson Reuters

The headline data, however, actually meant very little. It's the detailed data that tells so much more about the true state of the employment picture. We hashed out those details at the website, which you can review here:

On balance though, it gave the overall February jobs report an A-, knowing the tepid payroll growth figure was misleading.

Everything else is on the grid.

Economic Calendar

Source: Briefing.com

This week is going to be even busier, and harder hitting.

Monday's retail sales reports for January are going to be scrutinized thanks to an alarmingly poor December report that may have been inaccurate. Economists are looking for another lull. If they get it, some observers will peg it as the beginning of a recession. If instead retail spending unexpectedly improves for January, the bulls will use it as evidence that December's stumble was little more than a math error. Either way, prepare for fireworks.

Retail Sales Charts

Source: Thomson Reuters

On Tuesday and Wednesday, brace for consumer and producer inflation data, respectively. It's been tamed, but almost dangerously so; a little inflation is actually a healthy sign of economic strength. Economists are looking for a repeat of January's tepid growth.

Inflation Charts

Source: Thomson Reuters

All eyes will be on this data, as it will shed some light as to what the Fed is likely to do with interest rates in the foreseeable future.

Finally, keep an eye out for Friday's capacity utilization and industrial productivity reports. Both took a hit in January - again, thanks to the shutdown - so it will be noteworthy to see if they've recovered. Most economists think they did.

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