U.S. DATA IMPROVES IN APRIL, BUT NOT AS MUCH AS EXPECTED Economic Data April 2015’s economic data (which largely reflect economic activity in March 2015) showed that the economy has bounced back from some temporary factors that had been restraining growth, but not as much as expected and data generally continued to disappoint. Unlike the first quarter of 2014, when unusually harsh winter weather over much of the country accounted for almost the entire economic slowdown, in the first quarter of 2015 the economy was hit by several temporary factors, some of which have passed (unusually severe winter weather in parts of the country and a strike at major West Coast ports), but others whose influence may extend further into 2015 (a stronger U.S. dollar and capital spending reductions in the energy sector). The Citigroup Economic Surprise Index, an aggregate of economic data surprises relative to consensus economist expectations, remained well below zero as of the end of the month, indicating data have continued to surprise to the downside. (Net positive surprises results in a value above zero, net negative surprises below zero.) But the index has come off of its March lows, and several reports for March rebounded after declining in February, including retail sales, manufacturing production, housing starts, and durable goods orders. Despite disappointing data overall, The Conference Board’s Leading Economic Index (LEI) continued to climb year over year, which has historically indicated a well-below-average probability of a recession within the next year.

April 2015 in Review