KEY DATA: Orders: +0.8%; Capital Spending: 0%/ Consumer Confidence: -1.9 points/ NonManufacturing Activity: -0.4 points/ Housing Prices: +0.4%

IN A NUTSHELL: “March went out like a lamb and April was baaad as well.”

WHAT IT MEANS: If the Fed was hoping for a spring rebound, it will have to wait a little longer. The recent data have hardly been great and today’s numbers continued that trend. Durable goods order rose solidly in March, but were up less than expected. Part of that may have been due to the oddity that Boeing reported a sharp increase in orders but the government had civilian aircraft demand falling. Don’t ask me why, I just don’t know. The rest of the report was mixed. Orders for machinery and communications equipment were up while demand for computers, electrical equipment and motor vehicles declined. Private sector non-aircraft capital goods orders were flat, which was disappointing given they had cratered in February and a bounce back had been expected. Order books are not filling, so don’t expect any great surge in production anytime soon.

The Philadelphia Fed reported that activity in the non-manufacturing portion of its regional economy expanded slightly slower in late March and early April.   Yet this was not a bad report. Hiring, the workweek and wages and benefits all were up solidly, indicating that activity is solid. It is also pointing to a growing labor shortage in the Mid-Atlantic area. In addition, expectations, especially about business activity, were up solidly, pointing to growing confidence that the region’s economy should do well in the months to come.

The Conference Board reported that consumers were a touch less optimistic in April. It was interesting to see that the current conditions index rose nicely, but expectations dropped even more. Maybe everyone is just depressed about the primaries. I don’t know.

Finally, home prices continued to rise, as the S&P/Case Shiller national home price index moved up solidly in February. Gains were across the nation, with Portland and Seattle posting double-digit increases over the year. Still, the rise is slowing, which is good news for potential buyers.

MARKETS AND FED POLICY IMPLICATIONS: The FOMC begins its two-day meeting today and none of the numbers released today should change anyone’s thinking about the condition of the economy or whether rates should be increased. The really interesting reports come out later this week. It is very likely that Thursday’s GDP report will show that there was tepid economic growth in the first quarter. However, on Friday, the Employment Cost Index release could indicate there was a sharp acceleration in wages and salaries. We saw a hint of that in the Philadelphia Fed’s survey. Chair Yellen is watching labor costs as a key indicator of labor market tightness and the Employment Cost Index is one of the better measures of those pressures. Labor costs had cooled, surprisingly, during the second half of 2015, but I think that was not the case early this year. If that forecast is accurate, eyes will turn to next week’s jobs report and wages. While I think the hourly wage number is largely meaningless, it is viewed by the markets as containing some information. That too could be show accelerating wage pressures. But until we see that labor costs are indeed on the rise, Chair Yellen will be able to say that there is still a lot of room for the Fed to stand pat – which is what I expect tomorrow’s statement to indicate.