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May 5, 2008
The Weekly Monitor
 The Federal Reserve cuts rates one more
time and signals a move to the sidelines…
For now.
 The case for still lower policy rates remains
convincing.
 Q1-GDP data highlight sharp deceleration
in real consumer spending.
Carlos Leitao, Chief Economist
[email protected]
(514) 350-3000
Sébastien Lavoie, Economist
[email protected]
(514) 350-2931
Boris Wyka, CFA, Strategist
[email protected]
(514) 350-2975
For subscription:
Martine Bérubé, Coordinator
[email protected]
(514) 350-3006
 Non-farm payrolls for April: Employment
declines by 20,000.
Carlos Leitao
Chief Economist
The Monitor - Week of May 5, 2008
The Federal Reserve cuts rates one
more time and signals a move to the
sidelines… For now
As widely anticipated, the Federal Reserve announced on April 30 th
that it was lowering the federal funds rate by 25 basis points to 2.00%,
and moving to the sidelines; the discount rate was also lowered by 25
basis points to 2.25%. The decision was not unanimous as Richard
Fisher and Charles Plosser preferred no change in the Fed funds rate.
The key sentence in the accompanying statement was: “The
substantial easing of monetary policy to date, combined with ongoing
measures to foster market liquidity, should help to promote moderate
growth over time and to mitigate risks to economic activity”. Quite
tellingly, the Fed also dropped its assessment that “downside risks to
growth remain”. While signalling a clear preference for a more neutral
stance, this is not necessarily as explicit a commitment as some
market participants would have preferred.
The case for still lower policy rates remains convincing
The key issue, in our opinion, is that once recession becomes well
entrenched, the downside risks rise dramatically. This is all the more
problematic in an environment characterized by fragile financial
markets; and the Fed still concedes that financial markets remain
under “considerable stress” and credit conditions are still “tight”. In
these circumstances, it would have been preferable to quickly bring
policy rates to about 1.75% or 1.50% in order to short-circuit an
eventual negative feedback loop. The housing market in particular has
yet to hit bottom with all the economic and financial risks this entails:
namely that increased credit losses further hamper banks’ ability to
provide new credit, leading to increased unemployment, lower
confidence and, ultimately, yet higher credit losses (i.e. a negative
feedback loop).
US Housing Starts and
Building Permits
2.5
Central Bank Policy Rates
2.3
7.00
Units (Million)
BoC Overnight Rate
Fed Funds Rate
6.00
5.00
4.00
3.00
2.00
2.1
1.9
1.7
1.5
1.3
Housing Starts
1.1
Building Permits
Source: Bank of Canada, Federal Reserve Bank
As far as we are concerned, the Fed should cut rates again on
June 25th by 25 basis points as the economic indicators to be
published between now and then will likely show continued
deterioration, particularly on the housing front. In fact, the pace of
layoffs in the United States has picked up since the start of the year
while new hiring has not improved significantly.
More generally speaking, this past week’s main economic indicators -from the April employment and ISM reports to the advanced Q1 GDP
estimate -- suggest the U.S. economy has basically stalled (and may
have even entered a mild recession) but is not “vanishing” into a deep
recession. Financial markets could then be justified in concluding that
the Federal Reserve has rightly moved to the sidelines. However, we
continue to believe that only a marked improvement in the economic
data “guarantees” a neutral Fed. Anything short of a durable
improvement (as opposed to a temporary boost provided by the fiscal
package over the next three months or so) keeps the likelihood of
further rate cuts very much alive.
Apr-08
Apr-07
Apr-06
Apr-05
Apr-04
Apr-03
Apr-02
Apr-01
Apr-00
Jan-09
Jan-08
Jan-07
Jan-06
Jan-05
Jan-04
Jan-03
Jan-02
Jan-01
Jan-00
Jan-99
Jan-98
0.00
Apr-99
0.9
1.00
Inflation risks are real but, at this stage, present less of a burden than a
deep recession; we are not forecasting a deep recession but, at the
same time, the likelihood of such an event should not be so summarily
dismissed. Inflation remains a concern mainly because rising food and
energy prices risk “unanchoring” inflation expectations. Nevertheless,
we share the Federal Reserve’s view that commodity prices will at least
“level out” in the coming months. Moreover, an economy that is
growing well below potential for a prolonged period will inevitably open
up a significant output gap, which will exert downward pressure on
prices. Moreover, in the current environment, higher food and energy
prices could well prove to be more disinflationary than inflationary as
they force consumers to reduce discretionary spending by more than
would otherwise be the case.
Q1-GDP data highlight sharp deceleration in real
consumer spending
The advanced estimate of overall real GDP growth for the first quarter
of 2008 was surprisingly positive -- +0.6% SAAR – but hardly a picture
of strength. Real consumer spending decelerated sharply to only 1.0%
(2.3% in Q4-07, residential construction plunged yet again (-26.7%),
business investment declined (-2.5%) and net exports contributed less
than expected. Residential investment declined for a 9th consecutive
quarter and is showing no signs of stabilising; on a peak-to-trough
basis, the correction in residential investment has now reached a
massive 34%.
2
The Monitor - Week of May 5, 2008
8%
7%
6%
5%
4%
3%
2%
1%
0%
2%
Quarterly Change, annualized
Source: Hav er Analy tics
The most important sources of growth in the first quarter were an
unintentional (but small) build-up in inventories and a sudden jump in
defence spending. Final domestic demand, a better picture of
underlying trends in the domestic economy, declined 0.4% and should
decline again in the second quarter. We find it particularly troublesome
that business investment declined with spending on new machinery &
software basically stalling (-0.7%) and non-residential construction
dropping a very large 6.0%; non-residential construction had not turned
negative since Q3-2005.
Non-farm payrolls for April: Employment declines by
20,000

Rate of unemployment: 5.0%

Wages (y/y %): 3.4%
Fed’s inflation “comfort index” (rate of unemployment minus wages):
160 basis points (130 bps in December 2007 and only 60 bps in July
2007).
Dec-08
1%
Dec-07
-1%
Dec-06
-2%
Dec-05
-3%
Unemploy ment Rate
Av erage Hourly Remuneration, y /y
Dec-04
0.6%
R eal GD P
Dec-03
0.7%
C o nsump t io n
Dec-02
-1.5%
Invest ment
Dec-01
0.4%
Go ver nment
Dec-99
0.2%
N et Exp o r t s
Dec-98
0.8%
Invent o r ies
Average Hourly Rem uneration
and Unem ploym ent
Dec-00
United States: Contribution to
Real Q1-GDP Growth
Source: Bureau of Labour Statistic
The headline number is certainly not as weak as anticipated but is
hardly a picture of strength… Manufacturing (-46k) and construction
(-61k) continue to shed jobs, while the gains were primarily in the
professional & business services (+39k) and health & education (+52k).
The bottom line is that the U.S. economy remains weak and has now
experienced four consecutive monthly declines in employment. Our
simple measure of the Fed’s degree of “comfort” about inflation
(unemployment minus wage growth) continues to ease, in line with
growing labour market slack. This strongly suggests food and energy
inflation are not spreading to the rest of the economy.
Our base case forecast – shallow recession followed by sluggish
recovery – remains very much on track. Current market expectations
for a speedy recovery from what is now being described as simply a
“stall” are overly optimistic. In our opinion, monthly job losses will jump
into the 100,000 range this spring, and will likely remain elevated until
at least the Fall; the rate of unemployment will likely reach 6.0% by
year-end.
3
The Monitor - Week of May 5, 2008
North American Forecasts
This Week's Forecasts
This Week
(%)
Next 4 Weeks
In 3 Months
Canada
3-Month T-Bills
2-Year Bond
10-Year Bond
Canadian Dollar (CAN$/US$)
2.55
2.70
3.55
1.0100
-
2.65
2.80
3.65
1.0180
1.50
2.40
3.85
104
1.540
-
1.60
2.50
3.90
106
1.570
2.40
2.65
3.50
1.0050
-
2.60
2.85
3.70
1.0250
2.60
2.70
3.60
1.020
1.40
2.30
3.65
100
1.54
-
1.60
2.50
3.85
105
1.57
1.60
2.30
3.80
100
1.550
United States
3-Month T-Bills
2-Year Bond
10-Year Bond
Yen (Yen/US$)
Euro (US$/Euro)
05/05/2008
Interest-Rate and Exchange-Rate Forecasts
Historical Data
Forecasts*
2006
2007
2007 Q4
2008 Q1
2008 Q2
2008 Q3
2008 Q4
2009 Q1
2009 Q2
4.13
4.12
4.06
4.22
4.29
4.31
4.11
4.11
4.25
4.31
4.25
3.84
3.74
3.99
4.08
3.50
1.88
2.55
3.42
3.94
2.75
2.60
2.80
3.65
4.15
2.50
2.60
2.70
3.60
4.25
2.50
2.60
2.65
3.55
4.15
2.50
2.60
2.60
3.60
4.30
2.75
2.85
2.85
3.80
4.45
Federal Funds Rate
3-Month Treasury Bills
2-Year Bond
10-Year Bond
30-Year Bond
5.13
4.77
4.86
4.81
4.94
4.88
4.09
4.12
4.57
4.81
4.25
3.10
3.08
4.03
4.45
2.25
1.30
1.62
3.42
4.30
1.75
1.50
2.35
3.90
4.65
1.75
1.70
2.20
3.70
4.45
1.75
1.80
2.30
3.60
4.40
1.75
1.90
2.40
3.80
4.60
2.00
2.00
2.50
4.00
4.80
Canadian Dollar (US$/C$)
Canadian Dollar (Euro/C$)
Euro (US$/Euro)
Yen (Yen/US$)
0.876
0.690
1.270
117
0.952
0.680
1.400
117
1.002
0.687
1.459
112
0.974
0.616
1.580
100
0.980
0.632
1.550
102
0.970
0.634
1.530
98
0.950
0.625
1.520
93
0.960
0.640
1.500
92
0.975
0.659
1.480
90
Canada
Overnight Rate
3-Month Treasury Bills
2-Year Bond
10-Year Bond
30-Year Bond
United States
Quarter-end data and annual averages
May 5th, 2008
4
The Monitor - Week of May 5, 2008
Market Review: Bonds and Currencies
International 3-Month Rates
Current
Yield
1.25
2.48
0.57
3.60
3.91
3.68
4.85
U.S.
Canada
Japan
Germany
France
Italy
U.K.
International Bonds: Benchmark 10-Year Yield
Current
Yield
U.S.
3.83
Canada
3.72
Japan
1.50
Germany
4.18
France
4.39
Italy
4.67
U.K.
4.77
Provincial Bonds: Benchmark 10-Year Yield
Current
Yield
Canada
3.58
Alberta
4.14
British Columbia
4.15
Prince Edward Island
4.06
Manitoba
4.11
New Brunswick
4.11
Nova Scotia
4.12
Ontario
4.16
Quebec
4.28
Saskatchewan
4.15
Newfoundland
4.28
May-02-08
124
-68
235
266
243
360
May-02-08
-11
-233
36
57
85
94
May-02-08
Spreads (b.p.) against U.S.
-1 week
-4 weeks -1 quarter
- 1 year
111
-78
342
252
228
350
-74
-438
-116
-108
-112
40
65
-269
42
52
20
221
Spreads (b.p.) against U.S.
-1 week
-4 weeks -1 quarter
- 1 year
Jan-08
-2
-230
43
65
90
102
59
-70
207
257
261
392
-49
-300
-46
-41
-24
41
-3
-251
28
40
63
49
Spreads (b.p.) against Canada
-1 week
-4 weeks -1 quarter
- 1 year
Jan-08
55.8
56.8
48.3
53.3
53.3
53.8
57.8
69.8
57.3
70.3
61.0
62.0
72.5
67.5
67.5
67.0
63.0
74.0
62.5
70.5
May-02-08
-1 week
1.0182
0.9821
0.9366
1.9755
105.33
1.5432
1.0158
0.9844
0.9395
1.9908
104.30
1.5647
-2
-225
38
58
92
93
103
-172
164
161
126
320
Jan-08
31
-206
43
55
83
98
44.7
43.7
56.5
49.7
49.2
49.2
47.7
91.1
47.2
52.9
20.0
22.0
34.0
22.0
28.0
28.0
27.0
35.5
25.0
33.0
21.0
24.0
20.0
23.0
21.0
24.0
21.0
23.0
20.0
21.5
Currencies
-4 weeks -1 quarter
- 1 year
Jan-08
(%)
2.8
-2.7
-6.1
-0.4
-4.9
5.2
59.8
60.8
72.3
65.8
66.3
65.8
63.3
77.7
63.3
69.8
Currencies
Canada (Canada/US$)
Canada (US$/Canada)
Australia (Australia/US$)
U.K. (US$/£)
Japan (US$/Yen)
Euro (US$/Euro)
Data updated as at:
1.0275
0.9732
0.9132
1.9853
99.85
1.5805
0.9927
1.0074
0.9091
1.9778
106.73
1.4832
1.1069
0.9034
0.8207
1.9932
120.16
1.3587
05/05/08
5
The Monitor - Week of May 5, 2008
Market Review: Fixed Income Charts
Yield on 3-Month T-Bills
%
Yield on 10-Year Federal Bonds
%
7.0
7.0
Canada
U.S.
6.0
5.0
Canada
U.S.
6.0
4.0
5.0
3.0
2.0
4.0
1.0
Canada - Yield Curve
%
4.0
3.5
3.0
2.5
02-May-08
-1 month
-1 year
2.0
1.5
1.0
130
6m
2y
5y
30
Jan-08
Jan-07
Jan-06
02-May-08
-1 month
-1 year
3m
6m
2y
5y
10y
30y
Credit risk: TED spread
Spread between 3-month T-bills and eurodollar rates
Yield Spreads in basis points (Canada minus U.S.)
80
Jan-05
5.5
5.0
4.5
4.0
3.5
3.0
2.5
2.0
1.5
1.0
0.5
10y
02-May-08
-1 month
-1 year
Jan-04
Jan-03
Jan-02
Jan-01
U.S. - Yield Curve
%
4.5
3m
3.0
Jan-00
Jan-08
Jan-07
Jan-06
Jan-05
Jan-04
Jan-03
Jan-02
Jan-01
Jan-00
0.0
2.5
2.0
1.5
1.0
-20
0.5
-70
28-Mar-08
04-Jan-08
12-Oct-07
10y
20-Jul-07
5y
27-Apr-07
2y
02-Feb-07
6m
10-Nov-06
3m
18-Aug-06
-120
26-May-06
0.0
6
The Monitor - Week of May 5, 2008
Market Review: Stocks Exchange and Commodities
Stock Market Summary
Level
May-02-08
52w HI
Change (%)
52w LOW
(-1W)
(-4W)
(-13W)
(-52W)
Jan-2008
Canada
S&P/TSX
S&P/TSX 60
S&P/TSX Small Cap Index
14,280
847
692
14,626
850
838
12,132
710
610
1.3
1.2
0.5
4.5
5.4
1.8
7.2
8.8
3.5
3.7
7.9
-14.7
2.9
4.4
-2.3
United States
S&P 500
Dow Jones
Nasdaq
1,414
13,058
2,477
1,565
14,165
2,859
1,273
11,740
2,169
1.1
1.3
2.2
3.2
3.6
4.5
1.3
2.5
2.6
-6.1
-1.6
-3.7
-3.0
-0.7
-5.9
6,216
7,043
5,070
14,049
26,241
2,123
5,760
69,366
6,732
8,106
6,168
18,262
31,638
2,360
6,854
69,366
5,414
6,182
4,431
11,788
20,294
1,725
5,164
48,016
2.0
2.1
1.8
1.3
2.8
-0.3
1.7
6.4
4.5
4.1
3.4
5.7
8.1
3.1
1.7
7.6
3.1
1.1
1.8
4.1
8.8
7.8
-2.1
13.6
-5.9
-6.3
-16.5
-20.1
25.9
10.0
-8.5
37.1
-3.4
-11.8
-9.2
-6.7
-5.2
-7.4
-10.4
9.5
International
U.K. - FTSE 100
Germany - DAX
France - CAC 40
Japan - Nikkei 225
Hong Kong - Hang Seng
Russia - RST
Australia - ASX All Ordinaries
Brazil - Bovespa
S&P/TSX Sector Summary
May-02-08
S&P/TSX
Energy
Materials
Industrials
Consumers Discretionary
Consumers Staples
Health Care
Financials
Information Technology
Telecommunication Services
Utilities
Level
52w HI
52w LOW
Jan-2008
14,280
14,626
12,132
1.3
4.5
7.2
3.7
2.9
3,656
3,341
1,114
1,356
1,506
380
1,809
449
958
1,917
3,775
3,718
1,439
1,489
1,824
519
2,069
449
1,120
2,054
2,896
2,515
1,053
1,077
1,397
352
1,533
265
842
1,753
-0.4
-4.2
0.2
3.3
5.9
2.1
4.5
8.6
2.9
2.7
7.9
-3.4
-1.6
6.9
1.4
2.8
6.1
9.9
4.5
4.3
16.8
2.7
-6.1
9.9
2.7
5.1
0.1
32.4
7.9
-2.1
8.2
27.5
-18.8
2.2
-14.1
-25.8
-10.3
68.2
-6.6
3.8
9.0
5.5
-13.8
8.5
-4.9
-1.8
-1.9
13.7
-3.3
-3.4
Commodities
May-02-08
London -- Gold (US$/once)
London -- Silver (US$/once)
Aluminium (US$/LB)
Copper (US$/LB)
WTI Crude Oil (US$/barrel)
Natural Gas (Henry Hub) (US$/MMBTU)
(-1W)
Change (%)
(-4W)
(-13W)
(-52W)
853.00
16.49
1.32
3.86
116.32
10.48
52w HI
1011.25
20.70
1.44
4.03
121.57
11.04
52w LOW
642.10
11.18
1.05
2.87
61.48
5.35
Level
(-1W)
891.50
16.86
1.35
3.96
121.57
10.74
(-4W)
905.50
17.67
1.33
3.98
106.23
9.38
(-13W)
914.75
16.87
1.17
3.26
88.97
7.90
(-52W)
688.80
13.55
1.29
3.75
61.94
7.56
Jan-2008
840.25
15.05
1.07
3.04
98.42
7.63
Data updated as at:
05/05/08
7
The Monitor - Week of May 5, 2008
Calendar of Major Economic Indicators
KEY ECONOMIC INDICATORS
WEEK OF MAY 5, 2008
Canada
Date
Time
Release
Unit
Data for:
LBS *
Consensus
Previous
May 6
8:30
Building Permits
M/M
March
-
1.2%
-1.0%
-
April
-
55.0
59.0
Thousands
April
215.0
225.0
243.0
M/M
April
6.0%
6.0%
6.0%
Thousands
April
10.0
10.0
14.6
Billions
March
C$5.0
C$4.5
C$4.9
Unit
Data for:
LBS*
Consensus
Previous
Billions
March
-
$6.5
$5.2
Thousands
May
-
375
380
M/M
March
-
0.5%
1.1%
Billions
March
-
-$61.4
-$62.3
May 6
10:00 Ivey Purchasing Managers Index
May 8
8:15
Housing Starts
May 9
7:00
Unemployment Rate
May 9
7:00
Net Change in Employment
May 9
8:30
International Merchandise Trade
* Laurentian Bank Securities Forecast
Consensus from Bloomberg L.P.
United States
Date
May 7
May 8
May 8
May 9
Time
Release
15:00 Consumer Credit
8:30
Initial Jobless Claims
10:00 Wholesale Inventories
8:30
Trade Balance
Consensus from Bloomberg L.P.
8
The Monitor - Week of May 5, 2008
North American Economic Indicators
Canada
Month
Leading Indicator
Gross Domestic Product
Industrial Production
Manufacturing Shipments
Housing Starts ( ' 000) *
Retail Sales
- Ex-Autos
Trade Balance (M$) *
Employment ( ' 000) * *
Unemployment Rate *
Consumer Price Index
- Ex-Food & Energy
Industrial Product Price Index
Raw Materials Price Index
Money Supply M1
February
January
January
January
March
January
January
January
March
March
February
February
February
February
February
Monthly Chg. (%) or Level
Current
Previous
-0.3
0.6
1.1
1.3
257
1.5
1.3
3,260
15
6.0
0.4
0.4
0.1
0.5
0.1
0.1
-0.7
-2.5
-3.7
223
0.0
0.2
2,292
43
5.8
-0.2
-0.4
1.0
3.6
0.9
Annualized Rate (%) or Level
- 3 Month
- 6 Month
- 1 Year
-1.9
0.3
-6.5
-5.7
230
3.8
2.0
3,094
-3
6.0
1.1
-0.7
9.1
19.3
7.9
-0.4
1.1
-4.2
-9.7
231
3.4
4.2
3,320
31
5.9
0.9
0.4
1.8
16.3
4.6
2.2
2.2
-1.0
-3.6
201
6.0
6.7
5,016
27
6.1
1.8
1.3
-0.8
14.9
7.8
United States
Month
Leading Indicator
ISM - Manufacturing *
Consumer Confidence Index *
Industrial Production
Capacity Utilization Rate *
Manufacturing Shipments
Housing Starts ( ' 000) *
Retail Sales
- Ex-Autos
Trade Balance (M$) *
Non-Farm Payrolls ( ' 000) * *
Civilian Employment ( ' 000) * *
Unemployment Rate *
Consumer Price Index
- Ex-Food & Energy
Producer Price Index
- Ex-Food & Energy
Money Supply M1
February
March
March
February
February
February
February
February
February
January
March
March
March
February
February
February
February
February
Monthly Chg. (%) or Level
Current
Previous
-0.3
48.6
65
-0.5
80.4
-2.1
1,065
-0.6
-0.2
-58,200
-80
-24
5.1
0.0
0.0
0.3
0.5
-1.1
-0.4
48.3
76
0.1
81.0
1.1
1,071
0.4
0.5
-57,856
-76
-255
4.8
0.4
0.3
1.0
0.4
-1.6
Annualized Rate (%) or Level
- 3 Month
- 6 Month
- 1 Year
-2.9
48.4
91
-1.5
81.1
-5.3
1,178
-3.3
-0.9
-57,586
-77
-81
5.0
3.1
2.3
4.0
4.7
-4.0
-3.0
48.6
100
-0.1
81.2
2.6
1,347
1.6
4.1
-58,895
2
-49
4.7
4.7
2.5
1.0
3.2
-2.9
-1.5
50.7
108
1.3
80.9
5.5
1,487
2.6
4.3
-57,356
45
-15
4.4
4.1
2.3
6.8
2.5
-0.1
* Level
* * Average level for the last 3 months, 6 months and 1 year
Data updated as at:
05/05/08
9
The Monitor - Week of May 5, 2008
North American Forecasts
Canada
Historical Data
Real GDP (%)
Forecasts*
2006
2.8
2007
2.7
2007 Q4
4.2
7.2
7.4
2.1
3.9
0.7
5.0
0.8
1.8
4.7
4.2
5.1
3.2
3.7
0.9
5.7
1.0
1.1
7.4
6.9
14.3
2.4
6.7
-8.5
10.9
0.8
-0.2
4.5
6.2
10.5
2.2
3.5
-7.0
-2.4
0.4
0.2
3.8
1.9
3.5
-1.2
3.3
-1.5
2.7
0.4
0.0
3.5
2.2
4.9
-2.5
2.6
0.0
2.2
0.4
0.0
2.0
2.0
6.3
228
5.0
2.1
2.1
6.0
227
5.8
2.4
1.6
5.9
214
2.2
2.2
1.3
5.9
229
1.3
1.4
1.1
6.0
212
2.5
1.7
1.2
6.1
205
2.5
Consumption
Private investment
Machinery and equipment
Residential construction
Public investment
Exports
Imports
Federal budget balance in % of GDP
Current account balance in % of GDP
Inflation (%)
Total
Core
Unemployment rate (%)
Housing Starts (000s)
Before-tax profits (%)
0.8
2008 Q1 2008 Q2 2008 Q3 2008 Q4
0.0
0.6
2.6
2.3
2008
1.3
2009
2.3
3.5
1.9
4.0
-2.9
2.6
0.5
2.4
0.4
0.4
4.8
4.7
9.0
1.3
4.3
-3.4
4.9
0.4
0.1
3.4
2.4
5.4
-3.0
2.9
1.6
3.4
0.6
0.7
2.3
1.6
6.1
195
2.9
1.9
1.3
6.0
210
3.0
2.4
1.9
6.1
195
4.6
Real GDP (and its components) and before-tax profits: for quarters, quarter-to-quarter change annualized; for whole years, change
from the previous year. Inflation: change in price index from a year earlier. Unemployment rate: average rate for the quarter or the year.
* as of April 07, 2008
United States
Historical Data
Real GDP (%)
Consumption
Private investment
Machinery and equipment
Residential construction
Public investment
Exports
Imports
Inflation (%)
Total
Core
Unemployment rate (%)
Housing Starts (000s)
Before-tax profits (%, y/y)
Forecasts
2006
2.9
2007
2.2
2007 Q4 2008 Q1 2008 Q2 2008 Q3 2008 Q4
0.6
0.6
-0.5
1.3
1.3
3.1
6.4
5.9
-4.6
1.8
8.4
5.9
2.9
3.7
1.3
-17.0
2.0
8.1
1.9
2.3
4.1
3.1
-25.2
1.9
6.5
-1.4
1.0
-3.9
-0.7
-26.6
2.0
5.5
2.5
0.0
9.3
-0.5
-25.0
0.8
4.8
2.7
1.5
1.0
1.0
-10.0
1.7
4.5
3.2
3.2
2.5
4.6
1811.9
16.8
2.9
2.3
4.6
1343.8
2.7
4.0
2.3
4.8
1151
2.5
4.2
2.4
4.9
1035
2.5
3.5
2.3
5.3
950
-2.0
3.5
2.3
5.6
925
-0.5
2008
1.2
2009
1.6
2010
2.5
1.3
1.2
1.0
-5.0
1.8
4.4
3.4
1.4
2.1
1.5
-21.3
2.1
7.1
1.8
1.5
2.0
1.9
-2.8
0.8
5.1
3.7
2.3
4.1
4.2
2.8
0.8
6.1
3.9
3.0
2.2
6.0
975
2.0
3.5
2.3
5.5
971
0.5
2.4
2.0
6.0
1200
2.0
2.5
2.2
5.8
1300.0
5.0
Real GDP (and its components) and before-tax profits: for quarters, quarter-to-quarter change annualized; for whole years, change
from the previous year. Inflation: change in price index from a year earlier. Unemployment rate: average rate for the quarter or the year.
May 5, 2008
10