MarketWatch (03/29/15) Jeffry Bartash

The U.S. economy has slowed down nearly across the board, except for one important measure—job creation. Retail sales are soft, manufacturers are growing more slowly, and business investment has declined for six consecutive months. However, businesses are hiring at the fastest pace in 15 years, which could be an indication they expect the economy to accelerate in the spring. The first quarter may have been held back by short-lived events, such as heavy snowfall across much of the country, a rising dollar, and a decline in oil prices.

Wall Street Journal (03/30/15) Ben Leubsdorf; Jeffrey Sparshott

Consumer spending increased modestly in February as consumers earned more but saved more, a sign of cautious consumption that could temper economic growth. Personal spending rose a seasonally adjusted 0.1% from January, according to the U.S. Department of Commerce. Spending had fallen 0.2% in January and a revised 0.2% in December. When adjusted for inflation, consumer spending declined 0.1% in February, the first monthly decline in real spending since April 2014. Personal spending rose 0.4% from January to February. Economists polled by the Wall Street Journal had expected spending would rise 0.2% and income would rise 0.3%.

Wall Street Journal (03/27/15) Jeffrey Sparshott

U.S. consumer optimism declined in March, due to a slight increase in gasoline prices and wintry weather across much of the country, which weighed on lower-income households; in contrast, middle- and upper-income households reported gains in confidence. The University of Michigan’s final March sentiment index topped 93.0, up from the preliminary reading of 91.2 but below the final February reading of 95.4. Economists polled by the Wall Street Journal had forecast a reading of 92.0 for the final March sentiment index. March’s final current conditions index declined to 105.0 from 106.9 at the end of February, and the expectations index decreased to 85.3 from 88.0.

Despite the softer March reading, consumer sentiment largely has been positive. Consumer optimism reached a 10-year high of 95.5 in the first quarter, the survey found. “Such optimism is in line with our expectation for consumer spending to kick the year off with a solid first quarter,” says Derek Lindsey, an analyst at BNP Paribas. “We are looking for services spending to offset recent weakness in retail sales.”

Wall Street Journal (03/27/15) Jon Hilsenrath; Michael S. Derby

In a recent speech, Janet Yellen, chairman of the U.S. Federal Reserve, said the central bank likely will take a “gradualist approach” to raising interest rates in the years ahead, meaning it will move cautiously to avoid undermining the economic expansion. Yellen expressed cautious optimism the economy is getting to a point where it can withstand interest rates above the near-zero level required over the past six years.

“If conditions do evolve in the manner that most of my [Fed] colleagues and I anticipate, I would expect the level of the federal funds rate to be normalized only gradually, reflecting the gradual diminution of headwinds from the financial crisis and the balance of risks I have enumerated of moving either too slowly or too quickly,” she said. “I would be uncomfortable raising the federal funds rate if readings of wage growth, core consumer prices, and other indicators of underlying inflation pressures were to weaken, if market-based measures of inflation compensation were to fall appreciably further, or if survey-based measures were to begin to decline noticeably,” she said.

The fed funds rate may reach 0.625% by the end of the year, according to a median forecast of Fed officials, which means there could be two quarter-percentage-point rate increases this year. The rate then could increase to 1.875% at the end of 2016 and 3.125% by the end of 2017.