The economy’s growth is slowing across the board; jobs, consumer spending, retail sales, inflation, and manufacturing. Today’s jobs report shows that employers added 92,000 workers to payrolls in July, which was fewer than expected and fewer than June’s 126,000 gain. The slowdown reflects the first decline since January 2006. The jobless rate rose to 4.6% also for the first time since January 2006. Workers' average hourly earnings rose 6 cents, or 0.3%, in line with forecasts, after a 0.4 % increase in each of the previous two months.

Banks and other credit issuers took it on the chin this week with growing uncertainty in the credit markets. Citibank is down over 4% for the week while the S&P Global Financials Sector Index is down 4% over the past two weeks. The news of continuing declines in housing fueled worries that the broader credit markets would be damaged by a growing rate of sub-prime mortgage defaults and foreclosures. Wednesday, the National Association of Realtors reported that existing home sales fell more than expected by 3.8% in June to a seasonally adjusted annual rate of 5.75 million units, the lowest level since November 2002. Yesterday the Commerce Department reported that new-home purchases in June fell by 6.6%, the most since January.

With one day remaining, it’s safe to say that the second quarter was a good one for equity investors. The S&P 500 is up just a smidge under 6% and the NASDAQ increased by 7.7%. Much of the increases in both indices came in April as mega-corporate buyouts and mergers out did the former on a daily basis. Corporate earnings were surprisingly good as they climbed 11.6% on average during the second quarter, more than three times analysts' estimates in March. And the economy showed signs of improving growth without significant inflation pressures.

Once again the big unregulated hedge funds are roiling the markets. Stocks and bonds have been down over the last couple of days on concern that hedge fund losses at Bear Stearns may signal wider problems in credit markets, particularly the sub-prime mortgage markets. The two hedge funds’ speculation in sub-prime collateralized debt obligations has threatened collapse as creditors including Merrill Lynch, Bank of America, and Citigroup moved to sell some of their collateral at fire sale prices.