On Monday we found out that personal incomes rose 0.2% while personal spending went down 0.1%, not good for economic growth.
The Institute of Supply Management announced that the manufacturing sector contracted to 54.8% from the 57.2 in March, far below economists’ expectations.
Both these tidbits are bad economic news, but good for interest rates.
Wednesday the Fed left the prime rate as is, and said that they were not concerned about the weakness in the economy indicated in Monday’s news.
Wednesday, the Institute of Supply Management said that the service sector posted a robust 57.5% reading, which was much stronger than expected–up from March number of 55.2%.
Anything above 50% means that this job sector is expanding. They meet again in June, and so far it’s about 50/50 that they will raise the prime rate.
Thursday the Q1 productivity number DROPPED 0.6%, and that labor costs went up 0.3%.
Then the final nail in the hopes of lower rates was Friday. JOBS JOBS JOBS. 221,000 more jobs was a strong showing, which means more spending in the future, which means possible inflation.