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Investing Specialists

Steady as She Goes

The economy is not nearly as volatile as monthly data suggest.

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Other than a poor reaction to the nearly useless consumer confidence numbers on Friday, the market seemed to like the economic figures it saw this week. Month-to-month retail sales data that everyone has been intently waiting for increased 1.1% month to month, formally allaying fears of payroll tax increases curbing consumer shopping habits. Those fears were fed by earlier rumors that  Wal-Mart (WMT) had a "disastrous" start to February.

Another surprising drop in initial unemployment claims, now at their lowest level in five years, also helped move the markets along. Continuing on the employment front, the Job Openings report showed an increase in openings and an increase in people quitting--a sign of optimism. This bodes well for labor markets, perhaps indicating that last week's strong monthly employment report was not a one-time fluke.

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