Risk of Recession: -2%
The U.S. recovery is intact, and some of the softening in the February data is likely weather-related and doesn't alter the contours of the forecast. Because of the disruptions from the Northeast snowstorms, the probability that the U.S. will be in recession in six months increased from 30% to 32% in February. Weather weighed on hiring and homebuilding, but these losses will be recovered in March. Also, consumer spending is holding up well and Census hiring will provide a much-needed jolt to the labor market. We expect the economy to grow below its potential in the first half of this year, with real GDP increasing 2.5% and 2.3% at an annual rate in the first and second quarters,

Treasury International Capital Flows: -$44.2 bil
Net long-term capital flows to the U.S. in January eased further, to $19.1 billion, from $63.3 billion in December, driven by a massive selloff of private corporate bonds. Private foreign investors reduced their net holdings of private corporate bonds by $24.8 billion, the largest drop on record, due to stronger risk aversion. Monthly net TIC flows were -$34 billion.

FOMC Monetary Policy: 0.0-0.25%
The Federal Open Market Committee once again announced that it will be keeping the fed funds rate target in the 0% to 0.25% range "for an extended period." However, the committee will be withdrawing more of the extraordinary support it has provided over the coming months. In particular, the FOMC announced that it plans to close the two remaining special liquidity facilities over the next few months as scheduled. The statement said that the recovery is strengthening, with the labor market stabilizing, although a number of constraints on growth remain. Given few inflationary pressures, an increase in the federal funds rate is unlikely until early 2011. One member voted against the policy statement, voicing concerns about financial imbalances and longer-run stability.

Import and Export Prices: -0.3%
Inflationary pressures are not building rapidly, giving the Federal Reserve the flexibility to leave interest rates unchanged this year. Import prices declined 0.3% between January and February. This was the first decline since July, but energy was a factor, with petroleum prices declining by 2.2% following January's 4.4% gain. Excluding fuels, import prices increased 0.2% in February, half the pace seen in previous months.

Current Account: +12.9%
The U.S. current account deficit widened 12.9% to $115.6 billion in the fourth quarter of 2009, compared with the revised third quarter deficit of $102.3 billion (previously $108 billion). Moody's Economy.com had expected a slightly larger widening to $120 billion. The trade deficit widened from $96.4 billion to $108.9 billion. Meanwhile, the surplus on income narrowed by $3.9 billion to $25.1 billion.

Producer Price Index: -0.6%
Producer prices for finished goods fell 0.6% in February, most of which can be attributed to a 2.9% drop in prices for energy goods. About 90% of the February decline can be attributed to the gasoline index, which fell 7.4%. Producer prices are still 4.4% higher on a year-ago basis. Excluding food and energy, core prices for finished goods were marginally higher at 0.1%, compared with a 0.3% increase in January. Core prices for intermediate goods inched up 0.9%, whereas the crude core fell 0.6% during February.

SEMI Book-to-Bill Ratio: 1.22
The book-to-bill ratio of North American semiconductor equipment firms decreased in February to 1.22 from a revised 1.23 in January, remaining above parity for the eighth month in a row. Equipment orders rose 4.5% on the month and have returned to levels not seen since winter 2008.

Consumer Price Index: 0.0%
The consumer price index was unchanged in February, while the core CPI rose by 0.1% in the same month. The top-line CPI is up by 2.2% from February 2009, while the core CPI is up by 1.3% from February 2009 after seasonal adjustment. Inflation in the core CPI is low, indicative of a weak job market and consumer confidence, while moderate energy prices are also keeping top-line inflation down.

Jobless Claims: -5,000
Initial claims for unemployment insurance decreased by 5,000 to 457,000 for the week ending March 13. The decline was roughly in line with expectations and brings the four-week moving average from 475,500 to 471,250. This week's data include the March payroll survey week, and claims fell by 17,000 between the survey periods. The March employment report should be the first in a long time to show solid growth, boosted by Census Bureau hiring, some payback for February's weather effects, and stabilization in private payrolls. Meanwhile, continuing claims increased by 12,000 to 4.579 million for the week ending March 6.

Industrial Production: +0.1%
A series of major snowstorms hit the country during February, hindering factory activity. Total production rose 0.1%, but manufacturing output fell 0.2%. The Federal Reserve acknowledged the distortion in the report, and the trend in manufacturing likely was still positive excluding the snowstorms. Expansion in manufacturing is being driven by a mix of solid final demand growth and a positive, but diminishing, contribution from inventories.

NAHB Housing Market Index:-11.8%
The NAHB housing market index fell from 17 in February to 15 in March, a decline of 11.8% for the month. All three components-present sales, expected six months' sales, and prospective buyers' traffic-fell in March, confirming the still-low state of homebuilder confidence and the likelihood that recovery in housing markets will be more protracted than initially forecast.

New Residential Construction (C20): -5.9%
On par with expectations, housing starts declined to a seasonally adjusted annual rate of 575,000 in February, a 5.9% drop from January. Starts are still up slightly from one year ago. Weakness was particularly evident in multifamily starts. Single-family starts fell only 0.6% m/m. Permitting fell by 1.6% m/m. Completions increased by 5.4% as builders try to put up homes before the extended tax credit expires.

MBA Mortgage Applications Survey: -1.9%
In the week ending March 12, the MBA market index posted a modest decline of 1.9% from the week before, ending at 620.9. This decrease was attributable to the purchase index, which finished at 221.5, a decline of 2.3%. Meanwhile, the refinance index slipped 1.7%, ending the week at 2,955.9.

Chain Store Sales Snapshot: -0.4%
Chain store sales dipped 0.4%, in the week ending March 13, according to the ICSC sales index. This reversed little of the huge gain in the prior week. The year-ago change also dipped slightly, to 3.2%, still one of the strongest growth rates since July 2007, before the recession. Easy comparisons continue to support year-over-year growth.

Oil and Gas Inventories: +1.0 mil barrels
Crude oil inventories rose by 1 million barrels for the week ending March 12, in line with the consensus expectation. Gasoline inventories fell by 1.7 million barrels, surpassing the estimated 1 million barrel decline. Distillate inventories fell by 1.5 million barrels, in line with the consensus expectation. Refinery operating capacity inched lower to 80.6% from 80.7%. Petroleum demand fell sharply as warmer temperatures weighed on propane consumption. This report puts downward pressure on oil prices.

Weekly Natural Gas Storage Report: -11.00 bcf
Working gas in underground storage fell by 11 billion cubic feet during the week ending March 12, significantly less than the consensus expectation of a 30 bcf decline. Thursday's report will put downward pressure on gas prices.