Good evening, TSPwire Tactical Investor!

The U.S. economy lost 80,000 jobs in March, the biggest drop in five years, as weakness in the labor market spread beyond housing and finance to engulf a broad swath of businesses. The bigger than expected employment drop keeps pressure on policy makers at the Federal Reserve to cut interest rates aggressively when they meet at the end of April.

Stocks mounted a valiant effort to move higher Friday in the face of bad news about the economy. Then the air steadily leaked out of the market as worries mounted that Wall Street’s credit crunch is spreading into other sectors. Meanwhile the dollar weakened further against the euro and yen.

Despite a flurry of bad news in recent weeks, stocks have been on a solid upward trajectory. The advance started on March 11, when the Fed unveiled a plan to lend certain Wall Street banks as much as $200 billion of its own Treasury bonds and bills for 28 days. The move raised hopes that it would help thaw the credit crisis that has caused financial markets to seize up. Several other Fed initiatives have helped prop up stocks since, including its bailout of Bear Stearns, which was purchased at a fire-sale prices by J.P. Morgan Chase.

This week we will keep our allocation at the same level: 50% C Fund and 50% in I Fund.