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‘Unseasonably’ Weak Data Persists as Seasons Change

Adam Shell
USA Today
May 18, 2015

The winter chill that kept shoppers at home and slowed down business activity in the first three months of 2015 was the excuse Wall Street has used to look past the economic slowdown.

But with incoming data also coming in on the light side, growth bulls now have some explaining to do.

Today, another report, another miss.  This time it was the National Association of Home Builders’ (NAHB) sentiment index for May coming in shy of expectations.

“Consumers are exhibiting caution, and want to be on more stable financial footing before purchasing a home,” said NAHB chief economist David Crowe in a press release.

And that follows weak data on Friday, yet another day of economic reports coming in weak, a trend that runs counter to the bulls’ thesis that a rebound would kick in once temperatures started to rise. Friday’s latest clunkers were April industrial production, which contracted 0.3% month over month for the fifth straight month. Adding to the alarm was a sharp, unexpected drop in May consumer confidence tracked by the University of Michigan consumer sentiment index.

One market watcher thinks so-called “growth bulls” are in denial. Peter Schiff of Euro Pacific Capital says economists polled recently by Bloomberg and The Wall Street Journal are projecting too peppy an economic rebound in the final three quarters of the year. Economists still project 2.8% growth in the second quarter and 2.7% growth for the year.

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