Economic Update for 4/16/2007

Last Week in the News

American consumers lost confidence for the third straight month, with the Reuters/University of Michigan preliminary Consumer Sentiment Index, released April 13, hitting an eight-month low of 85.3 in April from March's 88.4. Consumers responding to the survey said they expect inflation to rise.

The March Producer Price Index (PPI) -- which measures prices before they reach consumers -- rose 1 percent after February's 1.3 percent increase, the Labor Department reported April 13. March's jump was slightly ahead of a 0.7 percent increase predicted by experts, who attributed March's jump to rising energy and food costs. Meanwhile the core PPI, which excludes food and energy prices, was unchanged.

Contrary to economists' predictions of a widening U.S. trade deficit, the gap actually narrowed in February to $58.4 billion from January's $58.9 billion, the Commerce Department reported April 13. Economists had predicted the deficit would widen in February to $60 billion. Imports of goods and services fell 1.7 percent to $182.4 billion and exports declined by 2.2 percent to $124 billion.

Imports from China fell to their lowest level since May 2006, with the trade gap dropping to $18.4 billion in February from January's $21.3 billion.

This week look for the Census Bureau's retail sales report April 16, and updates on the Consumer Price Index, housing starts and housing permits April 17.