It's been worse than we thought.
As economic indicators trickled in last month, investors found very little to cheer about. The economy contracted 6.2% in the forth quarter, the steepest decline since 1982 and much lower than the originally reported 3.8% decline. Some GDP estimates for the first quarter are now as low as a 10% contraction. Housing shows no sign of rebound. New home sales dropped a record 10% to an annual pace of 309,000, and builders broke ground on the fewest number of houses on record. The jobless rate rose to 7.6% from 7.2% and projections are for further deterioration. Worldwide, equity markets continued their decline while fixed-income market retreats were modest.
In our March 2009 Bond Market Commentary, Morningstar Indexes' Bill Mast provides further insight into the bond market's performance.
Sanjay Arya is director of Morningstar Indexes.