Thursday, May 1, 2008

The U.S. economy barely grew at a 0.6% real (after inflation) annual rate during 2008’s first quarter. This compares to identical growth in the previous quarter.  Recession in 2008?  A mild recession seems underway, though we may not know for sure for months. We expect modest U.S. economic growth to return in 2008’s second half

The U.S. unemployment rate climbed to 5.1% in March from 4.8% in February. The U.S. economy lost another 80,000 net jobs in March following February’s revised loss of 76,000 jobs. The U.S. economy added 1.1 million net additional jobs in 2007, an average of 91,000 net new jobs monthly.  The 91,000 average monthly gain was down 48% from the 175,000 average monthly gain in 2006

Consumer prices in 2007 rose 4.1%, the highest annual climb since 1990. We expect a more modest rise of around 3.0% this year

The Federal Reserve cut its important federal funds rate seven times by a total of 3.25% between 9/18/07 and 4/30/08, with the rate falling to 2.00%. We expect the Fed to now move to the sidelines for the balance of the year

We remain bullish on stocks