The Markets
Current economic conditions can be interpreted in different ways. Recent data and a possible credit crunch, resulting from the upheaval in the banking sector, suggest growth is slowing. After viewing the data, everyone has an opinion. Let’s review it:
- Consumer spending. This is the main driver of economic growth in the United States. While Americans are still buying, the pace of spending slowed in February, according to a late-March report from the Bureau of Economic Analysis. Less spending means lower demand for goods and services – and that affects production.
- Production of goods and services. Recently, the Institute for Supply Management reported that activity in the manufacturing sector – automakers, food producers, pharmaceutical companies, and other companies that make products – shrank for the fifth consecutive month. Activity in the services sector – airlines, banks, building maintenance, and other companies that provide services – continued to expand, but at a slower pace.
- Employment. The employment report indicated the labor market in the U.S. remained resilient and job growth was solid in March. Notably, there were fewer job openings and more Americans returned to the workforce. The unemployment rate remained steady at 3.5 percent.
Recession probabilities are going up at this point. The Fed has a difficult decision ahead of it – we remain invested but with caution built in.
Weekly Focus
Babe Ruth struck out 1,330 times, but he also hit 714 home runs. Don’t worry about failure. Worry about the chances you miss when you don’t even try.