We believe that the Fed will require both consistent solid hiring and a rise in inflation before it begins to lift rates.
More Quotes from Maury Harris:
The bond market had been worried that we were near full employment and wage pressure would pick up and that the Federal Reserve would have to raise short term interest rates in response. But now that the all important employment cost index was up just 0.6 percent, the Fed doesn't need to raise short term rates because the economy is slowing down.Maury Harris
You typically see a rebound in the labor force when the economy starts to recover. But because businesses are operating so much more efficiently, there's a limit to the number of jobs available. Unemployment could still go up a few ticks.
Maury Harris
With consumption accounting for about 70 percent of GDP, the extra strength should add about 0.7 point to total GDP growth.
Maury Harris
Both current conditions and expectations remain above their wartime lows, but the reversal of previous gains undercuts the notion that the slowdown early this year owed only to geopolitical concerns. Consumers are clearly troubled by the absence of new hiring, and worry about income prospects.
Maury Harris
This puts upside risks in our forecast for 4.5-percent annualized fourth-quarter growth.
Maury Harris
The implication is that raw winter weather may have depressed starts last month, particularly late in the month. Even so, starts remained above the 2003 average of 1.85 million units.
Maury Harris
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