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Week In Review

Retail Sales

According to a U.S. Census Bureau report issued last Friday, March retail sales fell 0.2%. While the decline was in line with expectations, February sales were revised to -0.3% from a previously reported +0.1%.

Our Take

Consumers drive the economy. Retail sales did not grow in the first quarter, as weakness in February and March offset a strong January. The economy will be hard pressed to gain momentum if consumers don’t open their collective wallets.


Housing starts fell 6.8% in March, while building permits rose 3.6%. March existing home sales rose 4.4%.

Our Take

The decline in housing starts was likely weather related, as nice weather in February resulted in increased housing starts, while March’s poor weather made housing starts more difficult. Existing home sales have been trending higher since 2011, but are nowhere near their pre-recession peak. The housing sector appears to be on solid footing despite higher mortgage rates, but is unlikely to be a major driver of future economic growth.


According to a Pew Charitable Trusts report released this week, the net pension liability nationwide reached $1.1 trillion in fiscal year 2015. This figure illustrates the difference between pension assets and benefits promised to workers. The report indicated that the average state pension was 72% funded in 2015, down from 75% during 2014. The states with the lowest funding ratios, all under 50%, include: New Jersey, Kentucky, Illinois and Connecticut.

Our Take

While the numbers for 2016 are not yet available, many expect the gap to widen even more. States with significantly underfunded pensions cannot afford for their pension liabilities to continue to grow. Lawmakers in affected states must make pension reform a priority.