Weekly Market Update: March 10, 2014
- Last week’s respectable reports on the job market, including the latest jobless claims figure, added credibility to the consensus view in the economics community and the financial markets that much of this year’s disappointing economic news has been distorted by worse-than-normal winter weather. And in retrospect, slow hiring in December and January may also have been partly an offset to stronger-than-normal hiring in October and November.
- The Fed likely will continue to scale back its asset purchases at its next policy meeting on March 18 and 19.
- This week’s February retail sales report probably won’t clarify the picture, particularly with weather distortions in the background.
- The weather and the latest political turmoil in the Ukraine provoke questions about what can go wrong to derail the economic recovery. Of course, bad things can always happen, but so can good things. And in economic recoveries, there are usually more good things on the horizon than bad. Economic recoveries tend to be better insulated against economic threats than they are when times are good and optimism is high.
- The series of scary developments that have popped up over the last couple of years offers good evidence of this. The data reveal few visible economic scars tied to these events.
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