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Investing Specialists

Tune the Static Out of Monthly Data

Don't let volatile monthly economic data points drive your outlook, writes Morningstar's Bob Johnson.

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This week, a broad range of economic indicators looked relatively soft compared with the previous month, but impressive versus figures from a year ago. There were no disasters in any of the data, but after a few months of truly impressive growth, this batch of statistics looked lackluster.

Manufacturing data looked weak, but that's after several months of results that were off-the-charts good. Housing data looked flat month-to-month, but year-over-year, the data looked respectable. Despite overall lackluster housing data, most reports showed reduced home inventories and higher prices even if volumes still remain pathetic. Weekly unemployment claims continued to edge up, at least partially due to seasonal factors that have become more onerous.

Robert Johnson, CFA does not own (actual or beneficial) shares in any of the securities mentioned above. Find out about Morningstar’s editorial policies.