By Evelina M. Tainer, Chief Economist, Econoday
March 7, 2003

February's employment report overshadowed the few good economic indicators there have been, showing bleak conditions for the nation's labor market. The unemployment rate rose, nonfarm payrolls plunged. The Fed's Beige Book wasn't all that great either, suggesting that economic activity remains soft around the country. The employment report caused market players to immediately consider a Federal Reserve rate cut at the March 18 FOMC meeting, but the consensus view among economists is that the Fed will be patient.

But economic news is downright rosy compared to the geopolitical situation. Hans Blix reported to the UN Security Council on Friday morning and had sufficient comments for everyone. He indicated that Iraq was making progress in its disarmament (score 1 for France, Germany & Russia), but also indicated that more information was needed and that progress was slow (score 1 for US, UK and Spain). President Bush practically announced that the US would go to war, with or without UN approval, at a Thursday night prime time press conference.