• Everything's riding on how freely U.S. consumers spend in the coming 6-9 months.On the plus side:

• A recent rally in consumer confidence.
• Buoyant home and auto sales plus optimistic forecasts.
• A low national unemployment rate (4.3% at latest read).
• The Fed's surprise half-point interest rate cut in April (bringing its cut year-to-date up to two full points).
• Hinting by the Fed that it might cut rates again as early as this month (its committee meets on the 15th).

On the minus side:

• Evidence that more firms are now resorting to outright layoffs as opposed to attrition through retirements, job hopping or cuts to contract and temporary help.
• Signs that consumers are buckling a bit under combined effects of high debt and plummeting asset values; a recent Moody's report says credit card loan write-offs and late payments are rising while loan payoffs are declining.
• Below-target early spring retail returns; Redbook average for same store sales in March vs. February was +0.4% compared to a +1.4% target.
• Warnings from some forecasters that gasoline prices could go back to $2 or higher this summer—maybe $3 in the Midwest.
• The fact that many mutual fund holders recently had to cough up unanticipated tax dollars for "gains" they realized, due to stock sales, despite declines in their funds' values.

Wild cards:

• The president's tax cut—how much cash he manages to deliver to consumers, when, and whether they spend or save it.
• First-quarter corporate earnings results and their effects on employment numbers.
• Growth forecast dwindles—again. While economists cling to the notion the economy will rally in second half 2001, their consensus growth forecast for real GDP continues to shrink. April 10 issue of BlueChip Economic Indicatorsshaves another tenth from the combined outlook for some 53 economic forecasting outfits, dropping the consensus to +1.8%.

• Nonfarm payrolls lost 86K jobs in March, as big declines in manufacturing (-81K) and retail trade (-46K) overwhelmed gains in the service (+11K) and construction (+12K) sectors. In the past five months, manufacturing and temporary-help sectors have lost more than half a million jobs combined.

Aided by rebounds in auto and business equipment sectors, factory output posted its first monthly gain since September.