Table: And Now Back to the Home Front
As President Bush launches his campaign to spur growth, he faces a patchy economic terrain.
ON THE PLUS SIDE
TUMBLING OIL PRICES
Economists reckon that each $10 per barrel drop in prices boosts consumer purchasing power by up to $50 billion and corporate profits by more than two percentage points.
Retail sales soared by 2.1% in March. And with consumers growing more upbeat following victory in Iraq -- and carmakers offering a new round of incentives -- further gains seem likely.
Anticipation of a quick victory in Iraq sent the Dow up 10% from its mid-March lows. While further gains will depend on corporate profits, the war rally provided a needed psychological boost.
ON THE MINUS SIDE
The slow-growth economy and soaring health-care costs have torn a big hole in state and local budgets. Faced with red ink totaling close to $70 billion, states are upping taxes and slashing spending.
Shell-shocked by corporate scandals, unsure of what's required under the new Sarbanes-Oxley law, and faced with excess capacity, CEOs remain reluctant to take on new workers or expand their businesses.
The economy has shed 465,000 jobs over the past two months. Although some of those losses reflect the call-up of reservists, employment remains weak.