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By Jeremy Glaser and Robert Johnson, CFA | 04-16-2014 01:00 PM

March Data Show Economy Still Half-Frozen

Economic data for last month didn't provide the full spring forward many hoped for and the economy seems to be stuck in its 2%-2.5% GDP growth rut, says Morningstar’s Bob Johnson.

Jeremy Glaser: For Morningstar, I am Jeremy Glaser. Has spring finally sprung in economic data? I'm here with Bob Johnson, our director of economic analysis, to look at some recent metrics.

Bob, thanks for joining me today.

Bob Johnson: Great to be here.

Glaser: We are starting to get lot of the data for March, and this had been closely watched. Why does this month seem like something more important than maybe some others we've seen recently?

Johnson: It's particularly important because we've had so many months that had been badly affected by weather. Even starting back in November, December, January, cold weather, shifting patterns made the data really, really hard to interpret. And if you looked at just the raw data, you'd say the economy was deteriorating pretty fast. If you consider that the weather might have been behind that, then maybe it's not so bad.

So March was a number where the weather was at least a little better, and after three months of really bad weather, it certainly was better and will give us a chance to look at the data. There may be a little less weather impact. And it should include probably a little bit of a bounceback factor. And so we're all watching the data with bated breath. And frankly the expectations for the data this week were exceptionally high with everybody expecting a really, really good bounce in March.

Glaser: So there has been some good data, some bad data, and some stuff in between. Let's start with the good. The first is auto sales. Can you tell us about those.

Johnson: That’s probably the best number of the batch. Those numbers have been volatile, we've had some great months followed by usually a couple of bad months. We had a great August, we had a great November. But since November's 16.3 million units, we've been under 16 million for December, January, and February. And finally now we got the March numbers at 16.3 million, which matched the November number, and was the highest number we've seen so far this recovery.

That was certainly an impressive number. We got the bounceback we needed. We desperately needed it because the auto producers have been producing a lot of cars, and if they hadn’t sold them, we would have a lot of cars built up in inventory. So I was really pleased with that number.

The only dark spot on that at all is that the year-over-year growth rate was about 6.8%. It had been as high as 7.8% last March. So the year-over-year growth rate did deteriorate just a little bit. But still at that 16.3 million units, that's great. If we can sustain that at least for another month or two, I think we're going to be in great shape, and it certainly indicates some consumer confidence or at least some great incentives from the dealer's; one of the two. But it was a good month for auto sales.

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