The first quarter of 2013 was smooth sailing for the US economy but recent economic numbers since the end of March have hit some kind of wall.

Here’s a recap of the recent economic numbers:

  • March ISM manufacturing 51.3 vs 54.0 exp
  • March ISM non-manufacturing 54.4 vs 55.5 exp
  • Employment and new orders sub-indexes in ISM non-manufacturing were weak
  • March ADP 158K vs 200K exp
  • March Non-farm payrolls 88K vs 190K exp
  • February core durable goods orders -2.7% vs -1.1% exp
  • The last two initial jobless claims reports have been worse than expected by an avg of 24.5K

That’s basically a collection of the biggest economic data points and they’re all pointing in the wrong direction.

The last good economic data point was February retail sales but the most-recent indications on the consumer look less optimistic, including consumer confidence.

This is the first sign of adversity and it will be the turning point — one way or the other.

Either it’s a mixture of seasonality, cold weather and delayed tax refunds or it’s real. If it is real, the situation is about to get worse because the sequester is just beginning to weigh.

The highlight next week will initial jobless claims and retail sales but it will be another three weeks before we get a better look at the current economy so uncertainty in the near term is here to stay. As we wait for more data, look for comments from executives.

Trading is about picking sides and I still believe the US economy is turning higher. House prices are rising, companies are investing and the jobs picture is okay. It’s not an easy call because there have been so many false starts in the past.

If the US economy is picking up, it’s an absolute green light for USD/JPY to go to beyond 100. Maybe even to 110. Europe, on the other hand, is languishing so the rallies in EUR and GBP will be selling opportunities but not until they run higher.

In short, the trends we have seen in the last three days could easily continue for another 2-3 weeks and that will be when it’s time to stake a claim about which way the US (and global) economy will go.