Manufacturing, Retail Reports May Disappoint

A report on March retail sales is expected to show a weak 0.1 percent increase.
A report on March retail sales is expected to show a weak 0.1 percent increase. (Jb Reed - Bloomberg News)
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By Neil Irwin
Washington Post Staff Writer
Monday, April 13, 2009

As economy-watchers everywhere continue their desperate search for green shoots -- little signs that the recession won't last too much longer -- this week could bring some sobering news.

Retail sales, excluding autos, were up a healthy 0.7 percent in February, contributing to a sense of optimism that the worst could be over for the U.S. economy. But tomorrow's report on March retail sales is expected to offer a more dour picture. The forecast is for a rise of 0.1 percent, which is better than the steep falloffs in sales at the end of last year but hardly a sign that any roaring, consumer-led recovery could be in the offing.

That said, retailers are expected to have fared better last month than the nation's manufacturing sector. Industrial production, to be reported on Wednesday, is estimated to have fallen 0.9 percent in March, following a 1.4 percent drop in February. America's factories are producing less and less stuff, which helps explain why the economy contracted sharply in the first quarter and will probably continue to contract, though more mildly, in the second quarter.

We also get readings this week on inflation in March, with wholesale prices released tomorrow and consumer prices Wednesday. Economists, including those at the Federal Reserve, don't see any real inflation risk on the immediate horizon, and the reports are unlikely to do anything to change that, as both the producer price index and consumer price index are forecast to be unchanged.

For those who prefer their economic reports in narrative form, as opposed to all those pesky numbers, on Wednesday the Fed will release its "beige book" report of anecdotal reports from businesses around the country. In a lengthy report like this, there are likely to be a few green shoots; the question is how many, and how green.

Finally, Fed Chairman Ben S. Bernanke is slated to give two public speeches this week, the first tomorrow at Morehouse College in Atlanta, where he'll discuss "Four Questions About the Financial Crisis," and the second at the Community Affairs Research Conference, where he'll talk about "challenges" related to innovation in financial services for low- and moderate-income consumers.

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