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By Jason Stipp and Robert Johnson, CFA | 02-21-2013 12:00 PM

Dark Clouds for the Economy?

Morningstar's Bob Johnson gives his take on recent disappointing retail and housing data, as well as higher gasoline prices and Fed stimulus worries.

Jason Stipp: I'm Jason Stipp for Morningstar. A recent string of lackluster economic data has some worried about the health of the U.S. economy. So how concerned should we be? Here to offer his insights is Morningstar's Bob Johnson, our director of economic analysis.

Bob, thanks for joining me.

Bob Johnson: Great to be here.

Stipp: We have a string of some disappointing economic reports that have some of the bears worried about the economy. Let's tick through some of the recent ones, starting with last week's GDP data out of Europe--not so hot.

Johnson: We had the third quarter in a row where GDP was down in Europe. So that certainly has got people concerned about the European situation.

Stipp: And over here in the U.S., retail sales for January looked pretty weak as well. It might have come close to expectations, but it certainly didn't look great.

Johnson: No, it was a relatively flat type of number, and people were thinking maybe we would have done a little better than we did, but those were the official government numbers. Some of the shopping center data was better. It was kind of odd. It was hard to say it was a truly awful report, but it certainly wasn't a robust retail sales report. And then we follow that up on Friday with the rumors out of Wal-Mart about the worst start to February they had seen in many years, and certainly that's got people very concerned about the retail sales environment.

Stipp: Then we look at real estate. We got a couple of pieces of data this week that you might have hoped would be a little bit better?

Johnson: Yes, builder sentiment ticked down just a little bit, but it was down, not up. Housing starts were off dramatically from what they were the month before--even though [the prior month's] number was revised way high up--but we had a pretty steep falloff there. And then housing starts didn't look so hot.

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