What Did We Learn From the March State Payroll Data?
The March sum-of-states (sos) payroll increase was 147,000, somewhat below the national gain of 192,000. The BLS warns against simply summing the states to get an aggregated national number, because the states are seasonally adjusted independently, and because the response rates between states are not always comparable. For these reasons caution has to be employed when comparing the state data with the national totals. We suspect that March was one of these months wherein these considerations rendered a larger than usual deviation between the national and sos aggregates.
Trading Today - CFNAI, Leaders ... Europe Still On Holiday
Today's calendar is quiet. We will get the CFNAI early this morning, followed by Leading Indicators mid-morning. Neither release is typically much of a market mover, and with London and European markets closed for Easter Monday the reaction should be that much less.
US Economic Chartbooks
Please see our Economic Week Ahead Chartbook for a discussion of next week's economic releases provided in a visually friendly format that includes graphs, brief descriptions of SMR's forecasts, and links to detailed data previews. If you missed anything from last week, see our Economic Week in Review Chartbook for a look back at the releases with links to full analyses.
SMRA Beige Book Activity Index Rebounds to 0.89
The SMRA Beige Book Activity Index (BBAI) rebounded to 0.89 based on our reading of the most recent issue of the Fed's Beige Book, after 0.55 in the prior report. Ten of the twelve Districts said growth was "modest" or "moderate". The reports from Cleveland and St. Louis both noted a slight decline in activity from moderate growth in the prior report. Cleveland said lingering impacts from severe weather was to blame. St. Louis did not specifically note why, but said that that while manufacturing still had a positive outlook, service sector business continued to be negative.
Fed Policy Outlook - One Step at a Time
One step at a time. While there are clear indications that the FOMC is thinking well ahead to the process of normalization for interest rate policy, it would be a good idea to take a deep breath and exercise some patience. We are in broad agreement with anticipating the Fed to finally start raising the fed funds rate target sometime around mid-2015. However, that is more than a year away and a lot could change in that time.