Much of the U.S. economic data in the last two months have been weaker-than-expected. And now some economists are warning of a spring swoon.
However, it’s not all bad news. In fact, some of the headwinds of recent weeks appear to be turning into headwinds.
High Frequency Economics’ Jim O’Sullivan points to lower gas prices and accelerating tax refunds.
…Gasoline prices have continued to decline and refunds have continued to show catch-up after this year’s slow start. The chart above shows the downtrend in wholesale and retail gasoline prices; the chart below shows the four-week total in tax refunds. Retail gasoline prices are on track to fall by around 4% before seasonal adjustment in April, which implies a 9% decline after seasonal adjustment—even larger than the 5% drop we expect in today’s CPI for March. The data provide more reason not to simply extrapolate the weaker-than- expected March numbers.
Here’s a look at gas prices:
And here’s a look at the recent pickup in tax refunds: