1. Global demand for U.S. goods strong
Those who fret about a recession point to home building and banking, both hard-hit by mortgage defaults. Yet a global boom continues to ignite demand for American goods and the workers who produce them. A fresh look at the job situation occurs Friday. Economist Brian Wesbury said payrolls will hold steady while joblessness remains at 4.9 percent. “We could see a slight rebound in hiring because bad weather contributed to winter weakness,” said Wesbury, of First Trust Advisors in Lisle. He said there will be no recession, “and payrolls will grow before the end of this year as the economy comes out of its funk.”
2. Manufacturing index said to drop
Manufacturing is in the spotlight Tuesday, with the monthly survey from the Institute for Supply Management. The index will drop to 46, from 48.3 a month earlier, say analysts at Global Insight in Lexington, Mass. Their view: “The economy is dependent on export growth” to avoid recession.
3. Car sales feeling sting of pump prices
With gasoline hovering near $3.50 a gallon, Detroit’s automakers will roll out March car and light truck sales on Tuesday. Analysts are predicting sales could be down by 12 percent from a year earlier.
4. Construction spending report due
Construction spending has fallen for four months in a row, culminating in a 1.7 percent drop in January. But the worst may be over. In February, combined sales of new and existing homes rose by 2.3 percent, the first sizable gain in a year. Analysts are hoping that rebound will show in a fresh report due Tuesday.
5. Outlook better for second half of year
As the markets await first-quarter corporate earnings, Chicago investment manager Marshall Front said the first six months of this year are creating plenty of shocks. But Front, of Front Barnett Associates, said, “We are likely to see an economic uptick during the second half of 2008, after tax rebate checks go out. In the meantime, some bank stocks and major retailers have begun to outperform the rest of the market.”
