The news last week of new weakness in U.S. employment and manufacturing was so disturbing that it caused major declines in worldwide equity markets and has increased the possibility of further interest rate cuts when the Fed meets at the end of this month. New job creation in the month of December was an anemic 18,000 and the unemployment rate spiked to 5% from 4.7% in November. The ISM Index measuring U.S. factory activity actually contracted below 48%, its lowest level since April, 2003.

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