Month of April 2019

• Employment: Total employment rose by 196,000 in March after adding only 33,000 (revised) in
February. The average monthly job gain in the first quarter of 2019 was 180,000 per month (223,000 in
2018). Notable employment increases for March occurred in health care (49,000), professional and
technical services (34,000), and food services and drinking places (27,000). The unemployment rate
remained at 3.8% in March, and the number of unemployed persons also was effectively unchanged at
approximately 6.2 million. The labor participation rate dropped 0.2 percentage point to 63.0% in March,
while the employment-population ratio fell 0.1 percentage point to 60.6%. The average workweek
increased by 0.1 hour to 34.5 hours for March. Average hourly earnings increased by $0.04 to $27.70.
Over the last 12 months ended in March, average hourly earnings have risen 3.2%.

• FOMC/interest rates: The Federal Open Market Committee meets at the end of April, with its report
issued on May 1. The results of that meeting will be covered in the next monthly report. However, based on prior statements from the FOMC, rates are not expected to increase at this time.

• GDP/budget: The initial estimate of the first-quarter gross domestic product showed the economy grew
at an annualized rate of 3.2%. The GDP expanded at a rate of 2.2% for the fourth quarter of 2018.
Driving the growth rate increase was a surge in business investment, growth in exports, and a decrease
in imports. On the other hand, consumer spending, as measured by personal consumption
expenditures, rose 1.2% — notably down from the fourth-quarter rate of 2.5%. Also of note, business
investment increased 2.7% and government purchases were a strong 2.4%. The federal budget deficit
was $147 billion in March ($234 billion in February), and sits at $691 billion through the first six months
of the fiscal year. Over the same period for fiscal year 2018, the deficit was $600 billion.

• Inflation/consumer spending: The report on personal income and outlays is one that is favored by the
Federal Reserve as an inflation indicator. The prices consumers paid for goods and services climbed
0.2% in March following a 0.1% gain in February. Excluding food and energy, consumer prices were
unchanged in March after nudging up 0.1% the prior month. In March, consumer spending rose 0.9%
(0.1% in February). Personal income inched up 0.1% in March after increasing 0.2% in February.
Disposable (after-tax) income did not change in March after climbing 0.1% in February.

• The Consumer Price Index increased 0.4% in March after rising 0.2% in February. Over the previous 12
months ended in March, the CPI rose 1.9%. The energy index increased 3.5% in March, accounting for
about 60% of the overall monthly increase. Core prices, which exclude food and energy, climbed 0.1%
in March, the same increase as in February. Core prices were up 2.0% over the previous 12 months
ended in March.

• According to the Producer Price Index, the prices companies received for goods and services rose 0.6%
in March after climbing 0.1% in February. The index increased 2.2% for the 12 months ended in March,
the largest 12-month rise since a 2.5% advance in December 2018. Once again, soaring energy prices
drove the PPI. Excluding food, energy, and trade services, producer prices were unchanged in March
from February.

• Housing: While new home sales have expanded, the market has been slower for existing home sales,
which fell 4.9% in March after climbing 11.8% in February. Year-over-year, existing home sales remain
down 5.4%. The March median price for existing homes was $259,400, up from $249,500 the prior
month. Existing home prices were up 3.8% from March 2018. Total housing inventory for existing homes
for sale in March increased to 1.68 million (3.9-month supply), up from 1.63 million existing homes
available for sale in February. Sales of new homes continued to expand in March following a robust
February. Sales of new single-family houses in March were 4.5% higher than in February, and 3.0%
above the March 2018 estimate. Falling prices and a few more houses on the market have helped drive
sales activity. The median sales price of new houses sold in March was $302,700 ($315,200 in
February). The average sales price was $376,000 ($385,300 in February). Inventory was at a supply of
6.0 months in March (6.1 months in February).

• Manufacturing: The manufacturing sector continues to sputter in March, as industrial production edged
down 0.1% after inching up 0.1% in February. Manufacturing production was unchanged in March after
declining in both January and February. Total industrial production was 2.8% higher in March than it was
a year earlier. On a more positive note, durable goods orders increased 2.7% in March after falling 1.1%
(revised) in February. Soaring commercial aircraft and motor vehicle orders drove much of the March
gain. New orders for durable goods excluding transportation increased 0.4% in March.

• Imports and exports: The latest information on international trade in goods and services, out April 17,
is for February and shows that the trade deficit continues to shrink. For February, the goods and
services deficit was $49.4 billion, down $1.8 billion from January's figures, which were $8.8 billion lower
than the prior month. February exports were up 1.1%, while imports rose only 0.2%.

• International markets: Canada's GDP fell 0.1% in February from the previous month, and is up 1.1%
since February 2018. In light of this news, it is expected that the Bank of Canada will keep interest rates
at their current level for what could be an extended period of time. Business surveys in China were not
as positive as hoped for last month. Despite Beijing's efforts to stimulate economic growth,
manufacturing growth has been slower than anticipated. Eurozone inflation has been subdued for quite
some time. However, Germany's annual inflation rate, which grew to 2.1% in April, exceeded the
European Central Bank's target level. British Prime Minister Theresa May's attempts to negotiate a
Brexit deal with the Labour Party has not been fruitful so far. Presuming a stalemate with no internal
agreement in place, Britain is likely to take part in next month's European elections.

• Consumer confidence: The Conference Board Consumer Confidence Index® jumped from 124.2 in
March to 129.2 in April. Consumers' opinion of current economic conditions improved in April, as did
their short-term outlook. Overall, consumers expect the economy to continue to grow at a solid pace into
the summer months.