The economic news this week was mediocre, but this should have been expected on the heels of the employment report. Often the employment situation projects the tone for the month. March's report was weaker than expected and so have been the minor economic data. In addition to sluggish retail sales, new jobless claims continued to come in above 400,000. Some of the gains in recent weeks reflect re-filings of workers who are reapplying for new claims on extensions. While it means that the new claims overstates layoffs, it also means that workers who became unemployed 13 weeks ago are still unemployed. Long-term unemployment is generally associated with economic weakness, not a strong recovery.

The sluggish economic reports could be friendly news for the markets since they imply that the Fed is not likely to raise rates imminently. But Middle East tensions that lead to oil supply disruptions and higher prices can't be fixed with lower interest rates. So while the Fed will certainly take the Middle East uncertainty into account, it won't by itself prevent the Fed from raising rates in the next couple of months if economic indicators start showing a more pronounced rebound.

While several key economic indicators will be reported this coming week (CPI, housing starts, industrial production) market attention will likely focus on Alan Greenspan's testimony on Wednesday before the Joint Economic Committee of Congress.