But the obvious effect is on utility consumption, which will affect industrial output in the economy. People consume more electricity, that places more demand on natural gas, coal, power, and electrical systems.
More Quotes from Ethan Harris:They're voting with their wallets and they're spending. There's always a concern that people just don't like what they're seeing, but they are still buying.
With inflation trending up, we believe the Fed will want to stay on the tight side of neutral for an extended period.
What happened is that initially the market breathed a sigh of relief when the storm was downgraded to a Category 4 and missed New Orleans, ... they are starting to look at the damage more seriously. We are seeing further upward pressure on oil prices. People are starting to think about the many aspects of the destruction here.
Everyone is all zeroed in on the consumer now, but the truth is that the consumer isn't the driver now. Confidence is picking up, but still at average levels. Wage growth is slow and the bulk of the tax cut is already in place. Finally, with all the debt people have taken out over the past several years the burden of paying monthly bills is leaving less for discretionary spending.
The CPI number doesn't have a big influence in Fed thinking, ... This keeps policy makers comfortable where they are.
Companies have been able to maintain incredible productivity growth for a low-growth economy. It does look like firms are finding ways to use technology and make do with fewer workers.
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