The economic data this morning is pointing strongly towards a slowing economy.

Two items came in as expected. The more important of the two that were as thought, was the Unemployment Rate at 4.5%. This matched predictions across the board, and was higher than last month’s 4.4%. Average Workweek was also as predicted at 33.8 hours per week. Like Unemployment, this is also below last month’s 33.9.

Of the two outside of expectations; Payrolls and Hourly Earnings, Payrolls is by far the more important, and moves rate more often.

Payrolls were forecast to grow by 100k to 120k. The Labor Department reported that only 88k jobs were added to the economy.

The Hourly Earnings report was also below its anticipated growth of +0.3% to +0.4%. It was reported in at +0.2% after adjusting for inflation.

This has move rates lower, though not as low as they potentially could, or should have. The 10-year Treasury is -.034% with the rate at 4.640%.

[Publisher’s note: In an attempt to clean up our blog, we will post all three outlooks on Monday only. We will post an outlook on days when one is modified.]

SHORT-TERM OUTLOOK [04 May 2007]

Next week is a fairly decent week in terms of the importance of economic events and the affect of rates. Monday and Wednesday are days that are light in data. Tuesday is when the Wholesale Inventories are published. Thursday is heavy with international trade data as well as the Treasury Budget. Finally, Friday contains the Retail Sales numbers and the Producer Price Index figures.

Steve Boxmeyer [612] 799 – 6858
steve@LendWithIntegrity.com