April US economy rains on May's parade

April US economy rains on May's parade

Overall April was a shaky month for the US economy. Leading indicators showed that it still has a long way to go. Several key factors, including declining GDP and Durable Goods’ figures, gave apprehensive investors further reason to pause. Other figures were mixed. In March, the Manufacturing Index declined 0.1%, as did Auto Sales Pace (-0.5%). Consumer Confidence fell from 102.4 in March, to 98 in April. Meanwhile, inflation rose to 2.2% in March. On a bright note, personal income grew 0.5% in March while spending grew 0.6%; economists had previously predicted each category would grow 0.4%. Overall, the US economy is beginning to resemble a quagmire. It will take some time before it becomes apparent whether the negative numbers represent a temporary hitch or a long-term trend. One thing is certain, with gushing fuel prices mobbing the daily headlines, something has to give. Wall Street already has shown its intolerance for the economic doldrums. Despite ending the month on a positive note, the Dow Jones was down nearly 3% for the month of April. The NASDAQ and S&P 500 lost 3.9% and 2% respectively. All eyes now turn to Tuesday, when Fed Chairman Alan Greenspan gives his quarterly state of the economy statement. At that time he is widely expected to raise interest rates a quarter-point to help combat inflation.