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Market Commentary by Scott J. Brown, Ph.D., Chief Economist<\/span><\/em><\/strong><\/p>\n Personal spending fell 0.2%, partly reflecting lower gasoline prices and more normal temperatures (lower household energy consumption). Ex-energy, spending would have risen about 0.3%. Inflation-adjusted consumer spending (70% of GDP) edged up 0.1% \u2013 it\u2019s only one month (and subject to revision), but spending appears to be on track for about a 2% annual rate in 2Q13 (vs. +3.4% in 1Q13).Fed policymakers are widely expected to begin tapering the rate of asset purchases at the September policy meeting (although that will depend on the economic data). Recall that it is total amount of securities purchased that matters, not the pace. There was no significant increase in long-term interest rates after QE1 and QE2 ended. The recent increase in long-term interest rates appears to be due more to growing expectations of a second half pickup in economic activity. However, long-term interest rates should not rise so fast that they jeopardize the recovery (so expect a little back-and-forth).<\/p>\n Next week, the ISM Manufacturing Index may set the tone for the early part of the week, but Friday\u2019s job market figures will carry the most weight. Payrolls are likely to post a moderately strong gain, while the unemployment rate is likely to hold steady (at 7.5%). The Fed wants to see \u201csubstantial improvement\u201d in the job market before tapering its asset purchases \u2013 and we\u2019re not there yet. Note that Fed officials are looking at a variety of labor market data, not just payrolls and the unemployment rate.<\/p>\n![\"Scott](\"http:\/\/www.clarksvilleonline.com\/wp-content\/uploads\/2010\/05\/scottjbrown-159x200.jpg\" "\\"Scott")
The economic data were mixed, but generally better than expected. Home prices continued to advance. Consumer confidence improved. The estimate of first quarter GDP growth was revised lower (a 2.4% annual rate, vs. +2.5% in the advance estimate), but consumer spending and business fixed investment were both revised a bit higher. Personal income was flat in April (the Employment Report had shown a decrease in hours offsetting the impact of more jobs).<\/p>\nIndices<\/h3>\n
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<\/a>Material prepared by Raymond James for use by its financial advisors.<\/p>\n