By Evelina M. Tainer, Chief Economist, Econoday
May 16, 2003

April's economic news was on the anemic side, but in May many private indicators are showing improvement. The decline in April retail sales was discouraging, but a plunge in energy prices likely overstated the weakness. Housing starts decreased in April, but weekly figures for May already suggest that an improvement is in the works.

Production fell, again. The Philadelphia Federal Reserve's business outlook survey, generally a good predictor of production, improved in May but remained in negative territory. The international trade deficit widened sharply in March, another factor that places downward pressure on the foreign exchange value of the dollar. A weaker dollar does increase prices on imported goods but also makes our goods more competitive overseas and generates export growth. Improved exports can go a long way in boosting industrial production.