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JEREMY HOBSON: Now let's get to some of the economic indicators that came in this morning.

Diane Swonk is chief economist with Mesirow Financial. She joins us live each Thursday and She's with us from Washington. Good morning.

DIANE SWONK: Good morning.

HOBSON: Well let's start with retail sales. They were up for a tenth straight month. Do you think it's safe to say consumers are in a spending mood again? Or is there something else going on here?

SWONK: Well, we saw the sales. We've got a lot of pent of demand in auto sales and those are still strong. But really much of this increase is still being driven by people having to pay higher prices at the pump. And once you strip out things like auto sales and oil prices, you see a much more tepid U.S. consumer. In fact, people are making trade offs -- cutting back going out to restaurants and bars, cutting back even general merchandise spending. Many retailers had to discount aggressively going into the Easter weekend which is typically a time when they don't have to discount as much. So, this really shows that the U.S. consumer is certainly facing some headwinds and having to make tough choices with their budgets right now.

HOBSON: And what about the job picture? We got the weekly jobless claims number this morning -- the number of new people heading to the unemployment office -- and it's relatively high yet again. Is that gas prices too?

SWONK: There is a link between gas prices in that big box retailers had a very bad month and there's no doubt that as they're having to do more discounting, they're not hiring up as much for the spring and summer as they had hoped to. And that's going to be working against us as we go into the spring and summer. We can only hope that the recent fall in oil prices that we've seen in markets stays around a little bit longer and can help alleviate some of this pain on margins. Because large and small firms alike feel the pinch of higher oil prices and can't pass it along in their margins, in their prices. They've got to cut somewhere else. And unfortunately that's been jobs.

HOBSON: And finally, the producer price index which gives us an early look at inflation came out this morning. What did that index tell us?

SWONK: Well we saw big increases again in oil prices and in food prices. And this is really hard on consumers. Things like egg prices were up more that 50 percent. Now eggs are a big, vital part of protein in our diet. And that's something that consumers feel directly when they go to the grocery store and are having to make trade offs in the composition of what they buy -- not buying as many fresh fruits and vegetables where the price increases have been most dramatic. And particularly when you see it in something like eggs that's a very difficult issue for U.S. consumers to grapple with.

HOBSON: Diane Swonk, chief economist with Mesirow Financial. Thanks so much as always.

SWONK: Thank you.