IHS Global Insight reports that volatility and risk aversion were still the dominant themes in the financial markets last week with the economy continuing to perform “surprisingly well in the face of recent pressures from lower equity prices and a barrage of negative reports on the situation in Europe, including a downgrade of Spanish debt at the end of the week.”
Global Insight said this week’s indicators support the theory that the economy is moving ahead at a pretty good pace in the second quarter.
“The May ISM indicators are expected to show only a slight pullback in momentum from April, motor vehicle sales will edge up slightly, and private-sector employment is expected to clock in at about 170,000 jobs.”
Adding back in the surge in federal Census workers, estimated to be close to 330,000, and subtracting some expected cuts in the state in local sector, “we arrive at close to a half a million jobs in May,” a recent Global Insight report stated.
“Recent declines in crude oil and gasoline prices are equivalent to a large tax cut, so these elements combined translate into some pretty hefty domestic spending power, at least in the short term.”
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