Steven Wood Vehicle Quotations

Huge swings in energy and motor vehicle prices have masked a sharp retreat in core producer inflation over the past 6 months.

Manufacturing is still mired in a deep recession. Although vehicle production has stepped up to try to maintain a low-cost financing induced sales explosion, the rest of the industrial sector is hurting badly.

The data are heavily distorted by a large military contract and the surge in vehicle sales. Once these have dissipated, orders and shipments will sag again.

Importantly for the Fed, the pace of real consumer spending slowed in March, and combined with early forecasts for lower vehicle and retail sales for April, suggests there is some scope for slower growth in the second quarter,