Ian Shepherdson Quotes (157 Quotes)

Katrina and Rita effects still linger, though they are fading, ... Claims will likely rise next week as the full effects of Wilma hit, but the downward trend is very clear.

The Fed's chief worry is still the labor market, ... So long as the unemployment rate does not fall further, and clear signs of consumer slowed own emerge, the Fed will be able to leave rates on hold.

The Fed chairman is not habitually in the business of delivering shocks to the markets unless the circumstances are especially dire. That is certainly a fair description of the situation in the states hit by Katrina, but it does not apply to the rest of the economy.

This hugely strong report will doubtless be cited as evidence that the housing market is not slowing. However, the extremely warm January weather surely distorted these data, just as it boosted retail sales and depressed industrial production.

There is no clear steer on policy in this speech analysts with different views will read it in different ways. But we think the Fed chairman knows recovery is here he just wants to be a bit cautious -- and in both directions, which means no more easing,

Clearly, these headlines will assuage some of the fears of a consumer collapse, and they mean the Fed will wait till the meeting before easing again. We still look for at least a 25-basis-point easing on Jan. 31.

The labor market is tightening, but the tightening is not accelerating.

Mr. Greenspan said next to nothing about the current economic situation in his testimony, ... does not sound to us like a signal he has changed his mind on the appropriateness of the current level of interest rates. The rest of the testimony was a clear and unambiguous plea to Congress not to abandon fiscal discipline.

While claims at 350,000 or so would not be a disaster, they would be consistent with (monthly) payrolls trending at only about 125,000 -- not enough to push the unemployment rate any lower.

It signals that the labor market has now moved again to center stage in the Fed's analysis and policymaking process.

It will profoundly damage Bush's ability to accomplish his legislative goals, ... drastic reforms of Social Security and Medicare, which would affect the state of public finances in the long run.

We have no real idea what the number next week will be, but we can be pretty sure that for the next few weeks the data will tell us next to nothing about the state of the economy across the country outside the areas hit by the storm.

If claims remain anywhere near this week's level, they will send a very strong signal that the labor market is tightening.

With three sub-300,000 numbers in the past four weeks, it is beginning to look as though there has been some real improvement in the labor markets this year.

We expect a big drop in September Katrina has depressed sentiment and pushed up jobless claims.

This report indicates manufacturing is continuing to rebound from the Asian crisis, which is exactly what the Fed expects.

It now appears that the trend in jobless claims is stabilizing at about 400,000 per week, ... This is well above the trend level at this time last year, but it is no higher than in the spring. This means that layoffs are continuing at a rapid pace, but they are not accelerating.

This testimony did not give the impression that he is in a great hurry to cut rates immediately.

Overall, solid domestic final demand, but the second quarter will be much weaker. We expect growth to slow to 3 or less, led by a sharp slowing in consumption.

Inventories remain very low and will add to third quarter and fourth quarter growth, too.

There should be no doubt that Mr. Greenspan's view has changed he now believes the economy is turning rather than just approaching the turn,

His testimony leaves us thinking that a June 25 easing is far from a done deal -- it will depend on the data,

We remain of the view that the Fed's near-term objective is simply to support the stock market until consumer and business sentiment improves,

The chairman will likely tell the House Budget Committee that conditions are set for recovery.

The bottom line here is that the month-to-month volatility in the durable orders data is such that the true information content in a single report is very small -- there's just too much noise.

The headline reflects a 3.2 percent rise in gasoline prices. Natural gas and electricity prices were also much stronger than the PPI suggested. The good news is the 0.1 percent core, which supports the Fed's view that transitory factors have boosted inflation in recent months,

This jump in inventories will marginally lift second quarter GDP growth expectations, ... We look for growth of between 2.5 percent and 3 percent, with inventories adding some 0.75 percent.

There is a specific reference in February to 'the pace of policy moves at upcoming meetings ... would depend on incoming data', suggesting a degree of potential flexibility that was absent from the December minutes,

There was no comment on future Fed policy, but ... with no inflation risk, Mr. Greenspan can wait until recovery is secure. In the meantime, rates are on hold.

Mr. Greenspan is at least partly to blame for the turnaround in the fiscal position here -- his musings on the problems of ever-increasing surpluses were a clear green light to Congress to cut taxes.

As far as we can tell, confidence now seems to have run a bit ahead of the improvement in the stock market, and the failure of the Nasdaq and Dow to make further progress in recent weeks makes it doubtful that confidence will continue to rise at the May pace. The sharp rise in unemployment is likely to become a negative factor, too.

Our forecast was undone by two factors. The impact of the post-Katrina spike in oil prices is lingering it will eventually fade. Second, trade in goods ex-oil and aircraft -- core -- deteriorated again.

The good news is that the expectations index is now more or less in line with the state of the stock market, so any further dips should be modest,

Ignore the ISM at your peril, ... Assuming this report is not a fluke - everything we look at suggests it is very real - it is consistent with year-over-year GDP growth accelerating to 4 percent by the summer.

Unfortunately, at current levels, and coupled with the extraordinarily low level of labor demand, the claims numbers are still consistent with flat or falling payrolls and a rising unemployment rate. There's no real relief in sight here yet.

His conclusion, in essence, is that much of the productivity explosion of recent years is permanent, but there is a risk that there is significant cyclical element too. Unfortunately, this leaves us none the wiser as to his intentions at the next (Federal Open Market Committee) meeting.

If sharply higher interest rates, and a plunging Nasdaq make people more optimistic, we are at a loss to know what it will take to depress confidence,

Expectations are a leading indicator and are consistent with modest spending gains. Stronger stocks will push the index up further, and soon. This is a good report.

After 911, the index made up all the ground lost, and more, by January '02. This seems as good a guide as any now, though in the meantime we expect a couple of very rough months for consumers' spending.

Both the unemployment rate and wages were stronger than consensus and they clearly make it very difficult for the Fed not to raise rates by a half percentage point.

Preparing the markets for a rate hike is a process in which the Fed gradually has to back away from its unduly pessimistic stance of recent months. This will take some time, but the process is now underway.

To be sure, it would be premature to argue this is the start of a new, hyper-weak trend in home sales, ... Nonetheless, these numbers do send an unambiguous signal that the housing market is now past its peak.

The trend in sales is probably not as weak as this seems to suggest, but there is no question that the condoco-op market is slowing much more dramatically than the market for single-family homes. Even in the latter case, however, sales have fallen more than 10 from their summer peak.

We are not forecasting a recession, but there is some truth to the notion that negative news can be a self-fulfilling prophesy. If companies expect demand to slacken, they scale back production. And if consumers expect doom and gloom, they scale back spending. That's just the way it works.

There's no question that these numbers have been persistently disappointing in recent weeks, ... It's not that layoffs are accelerating again -- we think the underlying trend of claims is stable at about 390,000 -- it is that we expected clearer signs of an outright decline in the number of claims.

At least economic activity is no longer 'decelerating,' as reported in the previous beige book,

Overall, this was another awful report, ... but given the size of the inventory overhang in manufacturing and the still-rapid loss pace of job losses it comes as no surprise.

The Fed will likely ease on Nov. 6, but the Beige Book has not changed the odds, ... And it tells us nothing about the future of the economy or Fed policy.

The Chicago survey is very susceptible to changes in conditions in the auto industry, where activity has been very volatile in recent months.

Not pretty, and getting worse.