Consumer Spending: There were no reports of consequence in this area last week.
Manufacturing: The Empire State fell to -7.7 -- the third consecutive negative reading in this index. The new orders index was also negative, at -7.8 -- which, again, was the third straight negative reading. The future indexes also dropped sharply. The only good news in this index was the negative readings were just barely negative -- unlike the Philly Fed index, which dropped sharply to a reading of -30.7. The new orders component of the index dropped sharply as well. On the positive side, industrial production increased .9%, with upward revisions to the preceding months.
Prices: Producer prices increased .2% MTM, but increased 7.2% YOY. Food price increases were an issue, but energy prices dropped. The good news in the report was a third straight month of decreases in crude goods -- which is attributable to a drop in energy prices. The CPI increased .5%. The gain was attributable to increases in both gas and food at home prices.
Real Estate: Housing starts dropped 1.5% from the previous month. However, this series has been bouncing along the bottom now for about two years. Existing home sales also fell, this time by 3.5%. However, like housing starts, this data series has been moving along the bottom for about two years, save for spikes caused by the new home buyer tax credit. Both of these numbers indicate real estate is still in the tank.
The reports last week were generally very weak. Manufacturing is under continued pressure and real estate is still in poor shape. The inflation reports may be such that they box the Fed in; however, this is ultimately in the Fed's corner as to how to react. Expect more of a slowdown to occur in the economy overall.