By Evelina M. Tainer, Chief Economist, Econoday
August 9, 2002

Economic indicators were light this week but they packed a mean punch. The non-manufacturing ISM index decreased and chain-store sales were soggy in July. Labor market conditions didn't deteriorate though, and inflation remains firmly under control. The productivity boom was a smaller than initially estimated, but a solid one nevertheless. Despite a decent recovery by equity prices this week, investors are not yet convinced that a bottom has been reached. The bond market, spurred by one or two very bearish Wall Street firms, is on a quest for severe Fed rate cuts. Bond market players are not expecting a rate cut at the August 13 meeting but are looking for signs from the Fed of potential cuts down the road.