Higher claims suggest slower job gains, which should dampen income growth, consumer spending, and overall economic activity.

Slowing income gains and increased uncertainty have savaged consumer spending. This has removed the only major support for the economy, insuring the recession will last, at least, into early next year.

The Fed will welcome this report as it suggests that slower economic growth will be extended into the third quarter. The probability of an August rate increase continues to diminish and is now below 50 percent.

The general slowing in the growth of the leading indicators over the past year suggests the pace of economic growth should gradually slow over the next three to six to nine months.

First quarter combined ratio and net income were very solid and premium growth in new markets has been strong. Last fall we announced plans to enter three additional states in the second quarter of 2006 to further our national expansion strategy. I'm pleased to announce that we will begin operations in Florida, Georgia and Pennsylvania in the second quarter of this year. These three states represent 15% of the total U.S. personal auto premium, bringing the percentage of the U.S. where we actively market to 45%.

We're especially pleased with solid fee income growth across the board, ... We see no signs of credit deterioration on the horizon.