The latest batch of reports produced more signs that the economy might be slipping into recession. Nonfarm payroll employment fell by a larger-than-expected 63,000 in February for the second straight monthly decline. Factory orders fell in January and the ISM Index is pointing to another drop in the manufacturing sector in February. The ISM nonmanufacturing index was not as low as in January, but remained below 50 in February—an indication of contraction in the services sector. The Federal Reserve's Beige Book, which reflects anecdotal information collected on or before February 25, "suggest[s] that economic growth has slowed since the beginning of the year." Most analysts continue to expect the Federal Open Market Committee (FOMC) to reduce the federal funds rate target by an additional 50 bps when they meet on March 18. An increasing percentage of investors are expecting a 75 bp cut.

[ Mon, 10 Mar 2008 00:00:00 GMT ]

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