Economic Numbers Confirm Let Up In Pace of Slowdown

The G20 meeting, a change in the 'mark-to-market ' accounting procedure and a few slightly better-than-expected readings made the week for the markets, as they continued to climb higher for the fourth consecutive week. Analysts and traders began to firmly call a bottom in economic activity. Is the market's faith well founded or is it fleeting? A more careful look at recent developments suggests that we may have reached an inflection point, which demarcates a rapid contraction and a contraction at a less rapid rate than previously.Pointing to the recent weeks' positive readings, Danske Bank said these signs of life support its view that the economy is in the early stages of stabilization and will return to positive growth in the second half of the year.That said, the non-farm payroll report released last week reinforced the weakness of the job market, with the March report showing a loss of 663,000 jobs. Additionally, the January reading was revised down to show a decline of 741,000 jobs in January. In March, job losses were broad based, with all sectors other than education and healthcare, showing employment declines. The manufacturing and construction sectors were the worst hit.A taste of things to come by was revealed by the weekly jobless claims report, which showed that new claims continued to rose to a 26-year high in the week ended March 28th, and a private sector employment report, which showed steep job losses for March. While initial jobless claims rose to 669,000 from the previous week's upwardly revised 652,000. Continuing claims for the week ended March 21st rose to 5.728 million from 5.567 million in the previous week. The ADP's employment report showed that job losses in the private sector amounted to 742,000 in March, much higher than the forecast for a decrease of 663,000 jobs. Manufacturing activity picked up from record low levels. The Institute for Supply Management's purchasing managers' index for March came in at 36.3, just above economists' expectation of 36. The new orders index rose by 8 points to 41.2 and the backlog of orders rose to 35.5, its highest level since September. While the production index remained almost unchanged, the employment index rose 2 points to 28.1. This is despite the NAPM-Chicago manufacturing survey showing that the business barometer index slid 3 points to 31.4 in March, marking the lowest reading since 1980. The indexes of production and order backlogs fell 2 points and 8 points, respectively to 32.7 and 21.3. However, the new orders index rose 0.3 points to 30.9 and the employment index climbed 3 points to 28.1. At the same time, the prices paid index fell to 34.1 in March from 37.8 in February.