Separate reports released today indicate that consumer prices have dropped and consumer confidence has risen.
The Dept. of Labor said the Consumer Price Index fell 0.3% in April, which erases the 0.3% rise in March and equals the biggest decline of the past 18 months.
A 4.6% post-war drop in energy prices, including gasoline and diesel prices, sparked the fall in consumer prices. OPEC is rumored to be cutting production rates next month to keep prices from dropping further.
Also released today, The University of Michigan's consumer confidence report rose to 93.2 from April's 86.0, faring better than analysts' predicted range of 82.0 to a high of 92.3.
However, the Commerce Dept. reported that the number of new housing starts in April dropped 6.8% to a seasonally adjusted annual rate of 1.63 million. But analysts said weather, not the economy, drove that decline.
And yesterday the government reported a 1.9% drop in wholesale prices, which sparked some fear of deflation.