The US economy is slowing down. Job growth data fell to its lowest level in two years. According to the Labor deparment, the economy added just 88,000 jobs, while the unemployment rate rose 0.1 percent to 4.5 percent.

The building sector lost 11,000 as new home construction slowed. Retailers are also having a hard time, losing 26,000 jobs. Manufacturers' payrolls shrank by 19,000 in March after declining by 18,000 a month earlier. The slowdown was also evident in the average number of hours worked, which decreased to 41.1 hours. Meanwhile, average overtime declined from 4.3 to 4.2 hours.

So the US economy is on track for an end-of-year recession. The housing market is leading the way, the US consumer is exhausted, and government debt is rising. Yet the Fed will find it hard to cut rates, inflationary pressures remain stubbornly strong. Any interest rate cuts will put further downward pressure on the dollar, which will push import prices up. Only two questions remain; how long and how deep.