Registered Investment Adviser Caleb Lawrence
The major averages couldn’t hold their early gains entering the final hour with large losses on little real news. Though Trump took another shot at starting a trade war with the announcement of Steel and Aluminum tariffs.
Personal income advanced .4% in January, slightly ahead of expectations. This marks a 7th consecutive decent advance but again much of the income gains are accruing to the asset side and a lot of January’s improvement was due to cost of living adjustments to various social benefit programs such as Social Security. That said quite a number of states and municipalities hiked their minimum wage to start the year. Personal spending slipped .1% in January on broad based declines. The few bright spots included gasoline, financial services, and transportation. The Personal Consumption Expenditure or PCE Deflator showed prices advancing .4% in January. Largely driven by gasoline and energy prices, on a year ago basis prices advanced 1.7%, as they have done for some time now.
Construction spending was unchanged in January with weakness in private and non-residential construction offsetting gains in public construction activity.
Manufacturing activity advanced in February with the Institute for Supply Management index gaining 1.7 points to 60.8 on strength in inventories and employment. Prices paid remain very high.