Economy Surging

Good news for investors as March retail sales increased more than expected. Retail sales increased by .7% in March even though most had predicted a more moderate .2 or .3% increase. This increase in sales was led by gasoline, building materials, apparel, and bars/food service. Also worth noting is that Feburary's increase was revised upwards from .1% to .5%.

At the same time as this data was released, the New York Empire State Manufacturing index showed very slow growth, notching up 3.8 points when most had been predicting a more healthy 10.1 reading.

So although manufacturing continues to suffer, American consumers are showing no signs of fatigue. The equity markets have taken their cue and are up sharply just after the open. In fact, the Dow has just crested 12,700 and is now less than 100 points from a new record high. About 10 days ago I mentioned that the Dow was at a key level. Now that that level has been passed, there is little resistance in the way of a new high.

However, tomorrow we get Consumer Inflation, Housing Starts, Building Permits, Industrial Production and other data that could put a damper on this rally.

One final side note, much less money flowed into the United States than expected in March, but because of the inherent volitility of the "TICS" data, and the shrinking trade deficit, it is of little concern.