Housing Shakes Off Pandemic’s Drag but Employment Report Sends Warning Signals

If home sales alone were an indicator of economic health, you might conclude that the economy has rebounded smartly from the pandemic-induced recession and is on a path for steady growth.

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April produced a mix of indicators, some stronger than others, but most landing firmly on the solid end of the performance spectrum.

The big economic news for this month is the much stronger than expected employment report; the big question is, why in the face of strong labor market, consumer spending (reflected in retail sales) has been trending steadily downward.

Anyone looking for clarity or consistency in the March economic data will have to look hard and will likely be disappointed. If there is a pattern, it is disjointed – a tug-of-war between competing narratives, one suggesting a confident upward trajectory and the other cause to question it.

A robust January employment report confirmed the economy’s strength, while triggering a bond sell-off that sent mortgage rates higher in early February.