By Evelina M. Tainer, Chief Economist, Econoday
5/4/01

The economic news was generally sluggish this week. Moreover, nonfarm payroll employment surprised economists and market participants by dropping sharply in April. The news of the past few days has generally showed a deteriorating labor market which could lead to further erosion of consumer confidence. A less optimistic consumer generally translates into a tightfisted consumer. Not surprisingly, the sluggish economic figures inspired bond investors who now believe the Fed will be able to continue their aggressive easing mode. But surprisingly, equity investors were also heartened by the news. Even though the economy is weakening, bond and equity investors viewed the week favorably.