Business News

The good:

Unemployment drops to 4.5%.

The trade deficit has shrunk.

Net worth of US households is rising.

Crude futures are falling.

The bad:

Inventories are up, which means demand has shrunk (which will probably increase the trade deficit next month). But it could be related to the cold weather as well. If the inventories don’t decline, we’ll see a reaction from the manufacturing sector in reduction of demand-based jobs.

So, the good is outweighing the bad. There’s nothing wrong with being cautiously optimistic here, even after last week’s 400 pt “correction” on Wall Street (remember, it was triggered by overseas stock adjustments).

Recall the warnings, though. Greenspan said there’s a possibility of recession. If the Democrats get their way and repeal Bush’s tax cuts, then there’s a likelihood of recession.

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