We read 243,000 Jobs added to the American Payroll, but hours dropped to 33.7 from 33.8; extra-special normal for the Organization month of Febuary. The Wage increase of 0.3% increase for the month, and 3.5% Year over Year reflect only partial Cost of Living increases. Nothing unhinged, and consisting of factors which were going to show anyhow. Whirlwind in an ant hill.
No direction can be discerned from the above information, but some type of forecast should be advanced; if only to express the foolishness of this Author. Here goes: The Workweek has to edge up to better 35.0 hours per Week, or this Year will see a Recession. Energy prices will not drop sufficently to prevent such a Stall, and Everyone believes there will be another eruption with the Hurricane Season and Winter. Wages should grow as rapidly as last Year to match Price rises, though only in the absence of a Recession; Fed Interest rates will not affect this basic equation, although they could incite the Recession. Construction is bound to drain its energy this Year, not even another Katrina could maintain the current Replacement rate for Housing and Plant. Manufacturing must pick up this Year, else the Recession is certain; this Year must be the Year of Trade deficit declines. The exact Date of the Recession start, if it comes, will probably be in August--peak Driving season with low stockpiles of Winter fuels.
This Author does not desire to sound like a Doomsayer, but all of the above elements will have to be regulated adequately to stay out of Recession. Free Markets sound good; the trouble with sounding good, though, comes in failure of efficiency to match verbal fanfare. The Federal Government is out of position as well, being unable to spend Us out of any generated Recession. Only the Summer will determine what direction the Economy will take, and concentrate on the areas of Capital Equipment and Material Resource pricing; as go they, so will the Economy take off in the opposite direction. lgl