The U.S. Federal Reserve building is seen on August 9, 2011 in Washington, DC.
The U.S. Federal Reserve building is seen on August 9, 2011 in Washington, DC. - 

Jeremy Hobson: The top policy makers at the Federal Reserve are holding a meeting today in Washington to decide what to do next when it comes to monetary policy.

For more on this, let’s bring in our regular Tuesday guest, Julie Niemann, analyst with Smith, Moore and Company. She’s with us live from St. Louis. Good morning, Julie.

Julie Niemann: Good morning, Jeremy.

Hobson: So most economists are saying they’re not expecting anything new from the Fed -- no change in interest rates, no new bond buying programs -- but also no pull back of the stimulus that’s already there. Do you agree with all that?

Niemann: Well that’s it, we’re going hold steady. They’re going to comment probably on the mildly positive economic environment. No hints of further easing but they won’t take it off the table either, just in case we get a shock. And by the way, this won’t be oil -- the rise in oil prices will not derail this economic recovery because we have more fuel efficient cars and we’re not driving as much. We’re just not heating.

Hobson: What about the news that retail sales are up? One of the things the Fed’s been trying to do with some of its stimulus is to get people to save less and spend and lend more.  Is this morning’s news that retail sales are up 1.1 percent last month good news?

Niemann: Well, 70 percent of the economy does depend upon spending because spending leads to more income; more income growth. It’s a virtuous cycle and it is showing up in retail sales -- even if you take out auto and gas: old cars replacement, price of gas is going up but not more is being consumed.

Retail sales are still up and nicely. Building materials, everybody’s fixing things. Good games and clothing, spring has sprung across the nation. And restaurants and we’re not just talking about cruising through Mickey D’s but independent restaurants are seeing real nice pick up here. That’s a positive, real direction. It’s not table pounding growth but it's positive. 

Hobson: You think we’re getting more confident, Julia?

Niemann: I think we’re seeing it simply because we’re looking at good postings and job gains. We had more than 200,000 last month and that’s the third month in a row that we’ve seen improving numbers. Now are they high-quality jobs, high-paying? Not particularly but they’re jobs and it’s heading in the right direction. We’ve got gradual improvement under way here.

Hobson: Julie Niemann, analyst with Smith, Moore and Company. Thanks as always.

Niemann: You bet.

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