The Producer Price Index (PPI), which measures the price of goods at the wholesale level, rose 0.7% last month, down from a 1% gain in March, the Labor Department reported May 11. But the more closely watched core PPI, which strips out volatile food and energy prices, showed no rise after also remaining unchanged in March. Economists had forecast a 0.2% percent rise in core PPI.

The Federal Reserve kept the federal funds rate, an overnight bank lending rate that affects credit card, home equity and other loan rates, at 5.25%. In its statement, May 9, the Fed noted that “the predominant policy concern remains the risk that inflation will fail to moderate as expected.”

Retail sales unexpectedly fell 0.2% in April, hurt by rising gasoline prices and a sluggish housing market. Economists had forecast a 0.4% increase.

The U.S. trade deficit widened more than expected in March to $63.9 billion, as higher oil prices helped push total imports to the second highest level on record, the Commerce Department reported May 10. The trade gap swelled 10.4% from February, surprising Wall Street economists who had pegged the trade gap at $60 billion.

The Mortgage Bankers Association’s index of mortgage applications increased 3.6% for the week ended May 4, the third consecutive week the MBA’s applications index has risen. Meanwhile, Freddie Mac reported that mortgage rates on 30-year terms eased slightly for the week ended May 11.

Employers added a net gain of 88,000 jobs to their payrolls in April, down from the 177,000 net increase in March and below Wall Street’s forecast of a 100,000 net gain, the Labor Department reported May 4. April’s job growth was the weakest since November 2004, when there was a gain of only 65,000 jobs. The unemployment rate edged up to 4.5% in April from the 4.4% reading in March.

U.S. business productivity — a measure of how much any given worker can produce in an hour — grew a greater-than-expected 1.7% in the first quarter of 2007. Economists expected a rise of only 1%. Meanwhile, unit labor costs grew 0.6% in the first quarter of 2007, well below the 4% rise analysts predicted.

The Institute of Supply Management (ISM) reported May 3 that its April index of manufacturing activity moved to 54.7, from 50.9 in March. Readings above 50 point to expansion in the economy. Forecasters expected the April index to hit 51.

The ISM also said its non-manufacturing index rose to 56 in April from 52.4 in March, beating Wall Street expectations for a reading of 53. The service sector represents about 80% of U.S. economic activity.

The National Association of Realtors’ Pending Home Sales Index fell 4.9% in March, following a 1.1% increase in February, the trade group reported May 1. Economists had predicted a 0.4% rise in the index.

Mortgage rates for the week ended May 4 remained unchanged on signs of weakening consumer spending and cooling inflation, Freddie Mac said.

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Economic growth slid to 1.3% in the first quarter of 2007, the slowest pace in four years, the Commerce Department reported April 27. By comparison, the rate of growth in the final quarter of 2006 was 2.5%. Sales of existing homes plunged 8.4% in March, the worst one-month decline in 18 years, the National Association of Realtors said April 25. The median price of an existing home fell to $217,000, a 0.3% decline from March 2006. Inventories of unsold homes nationally rose to a 7.3-month supply, the highest level since October. New home sales in March rose 2.6% over February, but were down 23% from March 2006, the second weakest year-over-year sales performance since September 2001, the Census Bureau reported April 25. Surprisingly, the median price of a new home sold in March was $254,000, up 6.3% from the price of a new home sold a year earlier. Orders for durable goods — those expected to last three years or longer — climbed a robust 3.4% in March, the Commerce Department said April 25. The pickup in orders followed February’s 2.4% gain, handily surpassing Wall Street economists’ expectations for a 2.5% increase. Reflecting worries over rising gasoline prices, consumer confidence in the economy fell to a less-than-expected 104 in April from 108 in March, according to the Conference Board’s Index of Consumer Sentiment released April 24. Analysts expected the index to come in at 105. For the week ended April 26, mortgage rates fell for the second straight week, following the sharp drop in existing home sales and signs of waning U.S. consumer confidence.

American consumers lost confidence for the third straight month, with the Reuters/University of Michigan preliminary Consumer Sentiment Index, released April 13, hitting an eight-month low of 85.3 in April from March’s 88.4. Consumers responding to the survey said they expect inflation to rise.

The March Producer Price Index (PPI) — which measures prices before they reach consumers — rose 1 percent after February’s 1.3 percent increase, the Labor Department reported April 13. March’s jump was slightly ahead of a 0.7 percent increase predicted by experts, who attributed March’s jump to rising energy and food costs. Meanwhile the core PPI, which excludes food and energy prices, was unchanged.

Contrary to economists’ predictions of a widening U.S. trade deficit, the gap actually narrowed in February to $58.4 billion from January’s $58.9 billion, the Commerce Department reported April 13. Economists had predicted the deficit would widen in February to $60 billion. Imports of goods and services fell 1.7 percent to $182.4 billion and exports declined by 2.2 percent to $124 billion.

Imports from China fell to their lowest level since May 2006, with the trade gap dropping to $18.4 billion in February from January’s $21.3 billion.