The best news of the week is not that Casey Kasem isn’t lost, but that small business sentiment has finally returned to pre-recession levels. Even though our government does its best to make running a small business as hard as possible, the National Federation of Independent Business reported on Tuesday that the Small Business Optimism Index rose 1.8 points to 95.2 in April. This is the highest report in over six years. Small business is the engine of the economy. As Martha Stewart says, “this is a good thing.”
Hopefully small business isn’t celebrating like a bad movie in Cannes, as much of the rest of this week’s news is tepid. Also, on Tuesday, the Commerce Department reported that business inventories for March increased 0.4 percent, after a 0.5 percent rise in February. Increased inventories, like an increased waistline, indicate that more is going in than going out. This can create a glut. Finally, the Commerce Department reported that retail sales only increased 0.1 percent to $434.6 billion. Like Botox to a runway carpet smile, the Commerce Department reported that revised March figures showed a 1.5 percent increase in sales, the largest in four years.
What may have been some of the reason for increased inventories and retail sale’s flatline, the Labor Department reported on Wednesday that wholesale prices for April increased 0.6 percent. The core measure, which removes the effect of food and energy, increased 0.5 percent. In the first quarter, however, household debt did a high kick that would make Solange Knowles proud with its increase of $129 billion. The main driver was the $116 billion spike in mortgage debt. The good news, however, is that total household debt is still 8.1 percent below the 2008 peak. Let’s keep it there, people.
Thursday produced a plethora of news that started with the Labor Department’s report that initial jobless claims from the week ended May 10th declined 24,000 to a seasonally adjusted 297,000. More people may have found work in the small businesses that feel better. Thursday’s other good news came from the Empire State Manufacturing Survey that reported manufacturing economic conditions in New York increased 18 points to 19. This is its highest level in four years. We’ve said for months that manufacturing is where it’s at, like two turn tables and a microphone.
Philly is not as happy as New York, though, as the Philly Fed Manufacturing Index showed a drop from 16.6 in April to 15.4 in May. Don’t pack your bags and move north too soon, Philadelphians. April’s report was really good. We see this as a rare stroke of bad luck. Rounding out Thursday’s not-so-good news, it was reported that U.S. industrial production fell 0.6 percent in May and consumer prices in April rose 0.3 percent. Excluding good ol’ food and energy, core prices rose 0.2 percent.
On Friday U.S housing starts, as reported by the Commerce Department, were up but mostly lead by an increase in apartment complexes. While this is good for the economy, it doesn’t necessarily suggest good things for consumers. Consumers, contrary to our expectations, are not happy. The Thomson Reuters/University of Michigan consumer sentiment index dropped to 72 and is its lowest in two years. We thought with improved job numbers and increased debt, that the American consumer would feel as lucky as a $2 bill these days.
Find out if you’re a spender or a saver before you hit retirement and need to use gimmicky tricks to make ends meet, because the last thing you will want to do is return to feeling overworked and overwhelmed. Experts are already lowering the standards of retirement, so the future doesn’t look too bright. As any recent college grad who feels underworked and overwhelmed will tell you.
As we and others see it, the economy is slowly getting better. Of course, we’re not convinced just yet that we will return to the old normal. But America is ingenious and humorous and with positive traits such as these things are bound to improve. Just as with our personal financial situations, America’s financial situation is a marathon, not a race. Wish us luck on Sunday!
That’s our recap of this week’s economic and personal finance news that worth your time. Hopefully you got a little chuckle out of it. Please share and come back every Friday for the Debt Free Guys’ #MoneyConscious Mash Up.
Oh, one more thing, don’t forget to buy our book #MoneyConscious Student that just became available for download on Tuesday. We’re excited and think you and the student in your life will find it worthwhile.