For those of us not choosing brackets in the mad month of March, the excitement has been limited to anticipating the Employment Situation report released on the first Friday of each month. And, if you guessed 215,000 jobs added in March, you were in the elite group of pundits who continue to be optimistic about the longevity of the current business cycle. The slack in the labor market is being whittled away, but at a very slow pace, which in turn is to be blamed for modest wage gains. This positive momentum does not make an April hike in the Fed funds rate a slam dunk, but a June hike cannot be ruled out just yet. Consumer confidence has plateaued, albeit at a higher level. Spending is strong for services though spending on goods has slackened somewhat on a year-over-year pace. The housing market recovery is on track and boosting spending on furniture and other home improvement services. Credit markets are yet to recover from the pause in recent months, as risk premia have widened and new regulations have made their way in to the system. Although talk of an imminent recession has more or less been quelled, the vulnerability of the economic expansion to dislocations has made investors cautious and play defense.
Source : CBRE Global Investors