– Main event: Worries that the economy will sink toward oblivion have begun to recede, while the threat of inflation seems to be shifting overseas. If so, the U.S. may be in for some of the best news on the economic front in months. Last week’s indicators continued to show that growth in this country is inching forward, with no signs of a recession. The jobless rate held steady during February at 5.3 percent, while job growth continued at a solid pace. Now for the clincher: This week’s report on wholesale inflation, due out Friday, could show prices headed lower. If so, it would put the inflation spotlight on Japan and West Germany, giving the U.S. a respite.
– Watch for: A drop in the wholesale price index of 0.3 percent for February, partially reversing the stunning 1.8 percent rise in January. That is the forecast of Brian Wesbury, vice president of Stotler Economics here. He and other analysts are saying inflation worries were overdone at midwinter, thanks to a surge in oil and vegetable prices due to December’s extreme cold. Those costs now are headed back toward terra firma.
– Downside: Gloomsayers are worried that, even if inflation lessens here, higher interest rates in Japan and West Germany would be shipped overseas, creating a global economic funk. “I’m afraid the U.S. economy gets the worst of it if interest rates go up here and in Germany and Japan,” said Peter Perkins, an international economist at DRI/McGraw-Hill Inc. in Lexington, Mass.
– Next up: The Commerce Department Tuesday reports retail sales for February. Commerce also reports the fourth-quarter current-account deficit.
– More events: A U.S. District Court judge in Washington Tuesday hears a suit filed by Olympic Federal Savings & Loan Association of Berwyn, challenging the government’s plans for bailing out the savings and loan industry. The Commerce Department Wednesday reports business inventories for January.
– Further: Commerce Friday reports housing starts; the Federal Reserve reports that day on industrial production and capacity use, both for February.
– Markets: Stock prices finished higher last week, as the Dow Jones industrial average gained 22.97 points, to 2683.33. The Dow now stands 4.6 percent higher than its level of Feb. 23, when it closed at 2564.19.
– Muni rush: There is a move afoot to put more money into municipal bonds, says Money Magazine. Its latest small investor survey says municipal bonds have lately been yielding around 7.4 percent tax-free, the equivalent of 10 percent or more on a taxable issue for investors in the 28 percent bracket. Sales of Kemper Group’s muni funds, which pay 6.3 to 6.9 percent, surged to $62 million in February, up 50 percent from January, says Money.
– Meetings: How to construct a business plan is the topic of the Service Corps of Retired Executives at 9 a.m. Monday in the Dirksen Federal Building, 219 S. Dearborn St. A light rail system for downtown Chicago is on the agenda at a Wednesday luncheon of the Building Owners & Managers Association of Chicago in the Fairmont Hotel.
– Conventions: The Paintcon Industrial Painting Congress & Exposition brings 6,000 to the O’Hare Expo Center in Rosemont Tuesday through Thursday. Simultanously, Plastics Fair expecting 8,000, will be at the Hyatt Regency O’Hare and O’Hare Expo Center. The Chicagoland Home & Flower Show, which is expecting 35,000 and is open to the public, will be at the O’Hare Expo Center Thursday through Sunday.
