Peter Morici Quotes (89 Quotes)

With crude oil prices soaring and China investing in new export capacity at a breakneck pace, the trade deficit will continue to pull down U.S. growth. Without a devaluation of the dollar against the Chinese yuan, U.S. growth will slow significantly in the second half of this year.

You couldn't say the number was completely unexpected.

After a brief reprieve, the specter of a winter jobs drought looms large and frightening.

Taken together, prospects for a reversal of recent energy price increases and the absence of other fundamental inflationary pressures indicates inflation provides no significant justification for raising interest rates further at this time.

As long as housing prices don't go down, consumers have more equity they can borrow against. If mortgage rates go up another 1.25 or 1.5 percent and pierce 7 percent -- watch out. That's when the housing bubble bursts and consumers would cut back on spending a lot.

This moderate wage growth should dispel any notions the Fed may hold (that) labor markets and spiraling wages could reignite inflation.

Clearly, inflation poses no real threat, but overly aggressive Fed interest-rate policy could torpedo the economic expansion.

The trade deficit is going to keep growing.

This pace of productivity growth indicates that the U.S. economy has the potential to accomplish 4 percent growth or better without danger of significant inflation.

The rating agencies and stock market are sending a clear message that the company will lose money for the foreseeable future and eventually go bankrupt. Bankruptcy is a serious option either strategically or as an eventuality.

The Fed will increase the federal funds rate to 4.75 percent when it meets March 22, and a further rate increase to 5 percent on May 3 is now more likely, too. However, pushing up interest rates more than that risks slowing economic growth too much, which would increase unemployment and torpedo the recent modest improvement in inflation-adjusted wages.

The real problem is the absence of resolve in the Bush administration to deal with China, ... It's policy toward China is not in shambles, but it's very close to it.

I think the worst is yet to come. I expect their market share to continue to shrink and their balance sheets to become more troubled.

Bush has a clear idea of what he wants to do on the economy, ... He's really not looking for people to come in and create new policy for him, rather to be a messenger and execute according to his blueprint.

It's not just the number of jobs, it's the quality of jobs.

This is part of a broader strategy to create greater certainty in pricing. Hopefully, dealers will abstain from playing games with add-ons and fees, and consumers will be more confident that they are getting a fair deal and the best deal when they bargain.

This visit is key because it will determine the line they will take in the report. The president is trying to find a way to avoid branding China as a currency manipulator.

Gasoline prices did rise in January. Spot prices for natural gas fell in December and January, but it is not clear how much of these markdowns filtered through to homeowners and commercial consumers.

Stagflation is rearing its ugly head, ... Slower consumer spending and disappointing business investment are causing slower growth, high unemployment and wages that lag inflation.

Overall inflation is under control and should moderate as we move through the summer.

The AFL-CIO is an intellectual Jurassic Park.

In a world where size matters less and innovation and adaptability are 95 percent of business success, the company that succumbs to union demands for wages greater than the market will bear or for work rules that reduce agility and efficiency, will be vanquished by a swarm of competitors.

The overvalued dollar will contribute mightily to the US trade deficit until the Bush administration takes decisive action.

If you look at the cash on hand and the market value of the stock, it means that investors' view of the company is that it has no value if you take out the cash.

A trade deficit like this is unacceptable, ... It lowers our GDP growth.

Business investment is increasingly the engine pulling the economy forward.

The trade deficit remains the single most important tax on U.S. growth and burden on American workers.

This is not a war on the scale that it changes the face or personality of the domestic economy, but it is a small tax on the domestic economy.

Construction labor and construction materials will be at a premium because it's going to take so much to rebuild that area.

Often, solutions we would never embrace as a long-term policy, like flooding banks with liquidity, are essential tactics for surviving a crisis.

China's purchases of dollars create a 33 percent subsidy on its exports, and are having a devastating effect on U.S. workers with only a high school education or only some college or technical training, ... Were foreign governments to stop manipulating currency markets, the trade deficit would be cut in half. (That) would increase GDP growth to about 5 percent a year and create as many as five million additional new jobs over the next three years.

Were the trade deficit cut in half, GDP would increase by nearly 300 billion, or about 2,000 for every working American.

The public is simply not as sympathetic to union causes today as it was 30 years ago, and that's a big problem.

The reality is across sectors and across regions the picture is very mixed. The auto sector is not only troubled, but becoming more troubled,

Large trade deficits divert consumer purchases at Wal-Mart from domestic factories to offshore producers in China and elsewhere. Wages adjusted for inflation will continue to fall as long as American workers must compete with subsidized Chinese imports.

It gets more and more out of synch every year. It'd really be just a fig leaf. In order for there to be a change in the trade relationship, it has to be a large change right off the bat -- at least 20 percent.

The trade deficit exceeds 6 of gross domestic product and is weighing down economic growth.

Businesses might ask for more (for consumer goods) but they won't necessarily get it, and then we'll see big discounts for Christmas, ... This squeeze will slow economic activity. The Fed needs to be very cautious how hard they take the economy downhill because it is already headed in that direction.

We really need some help from OPEC and the Saudis to help control inflation,

This is going to be the year we're going to see the Koreans surge forward. Hyundai is ready to make an assault on Chevy and Pontiac because they have more attractive offerings with a better warranty.

GM's 'employee discount' promotion established GM can sell vehicles if it sets prices at what consumers are willing to pay and makes those prices clear. Unfortunately, the public is not willing to pay what it costs to make GM cars and trucks.

It's really the tale of two cities. For highly educated and highly skilled people, especially those who don't face competition from overseas, the job market is pretty good. For others, it's not so good.

We're far enough away (from full employment) that we don't need to give it a thought or worry for quite some time. If the labor market starts to improve, we'll have a lot more people return to the labor force, so we need a lot stronger gains than we've been seeing to get near a 4 percent unemployment rate.

GM cannot go on providing the level of benefits they have been, if they want to stay in the business. It's not a matter of providing fewer benefits to increase profits, it's a matter of choosing to pay benefits it can afford, or getting to a place where it cannot pay anything at all.

Companies cannot provide gold-plated healthcare benefits and open-ended pension commitments,

If there's a prolonged labor stoppage, people won't be wanting to buy their cars again. They'll think the company might not be there to honor the warranty.

They're thinking, 'We went through the jump in energy prices and the hurricane and we came out without noticeable damages. Now it's the holidays, and gas prices are down, so consumers are feeling mellow and content - and cautiously confident about the future.

The largest threat to the survival of the automobile industry in the United States are the UAW Union Auto Workers Union contract and the legacy costs of retired employees on the one hand, and the management team that grew up in a rather cushy era in which they enjoyed market dominance,

Earnings of hourly workers have been falling for the last three years. Especially for the bottom 50 percent of the population, things have not been very good. But for the top 25 percent, real incomes have been going up rapidly. It's been caviar for the rich and cake for the rest.

The pension relationship with Delphi is complex. If trouble is beneath the surface, it could be a severe body blow. Along with GM's other troubles, a perfect storm could emerge.