Mixed Message on U.S. Consumer Health (Capital Market Research) (Weekly Market Outlook

U.S. retail sales have grown at a strong pace for two straight months. But, from a longer context the results are more volatile and less impressive. The outlook is for only modest growth for many of the same reasons. However, there are supports to growth. Job growth remains healthy, supporting growth in real wages. Unemployment is low. Debt burdens remain near historic lows. Inflation has declined and is expected to fall further. The stock market and household wealth are rising steadily. Elsewhere, residential construction moderated in March. Total housing starts fell nearly 15% to a seasonally adjusted annualized rate of 1.321 million units. The decline more than offset February’s gain and was well below expectations.