We notice it every day -- when we go to gasoline stations, we pay more,
Business spending is the Achilles heel of the economy, ... The economic baton needs to pass from consumers to businesses.
If you want to really help the economy right away, the fastest way to do that is to have the government spend the money itself, ... The next step would be to give tax cuts to low- and middle-income people, who are more likely to spend the money.
Once the employment picture stabilizes, around midyear, we should see a more rapid and sustained recovery in consumer confidence.
Our research shows the jobless rate is the best indicator of monetary policy, ... They have almost perfect correlation.
In a similar vein, the world is looking to the U.S. to lead a global recovery. Clearly, the U.S. economy was and still is the locomotive pulling the world economy, ... All across Asia, Latin America, everywhere I go, they are looking to the United States for recovery.
Had this report showed another plunge in confidence, then I think it would have been a sure bet to expect another cut sometime in April,
Two weeks ago traders thought there was no chance. If you had asked me Thursday, I would have said less than a 50 percent chance (of a December hike), at best I would have said a 50-50 chance. Now it looks pretty likely.
Corporate profits are likely to rise at double-digit rates in the second half of the year. And that will be hopefully enough to offset some of the negative psychology in the stock market -- assuming it doesn't get worse.
The central bank runs the risk of raising the interest rate too fast. Historically, the central bank had overreacted to inflationary pressures, contributing to economic recessions.
Probably the overall (CPI) number will be somewhat higher than anticipated, but like PPI, the core-number should be close to forecasts,
All the pieces are in place to generate healthy economic growth for the balance of the year, ... But so far, political and economic uncertainties have overshadowed the strengthening in corporate profits.
The rate cut could be temporary, but in these times of crisis, I think it's not inappropriate,
The Fed is still likely to cut rates in August. Some of the more important measures of economic strength, such as corporate profits, are moving in the wrong direction. The only real question is whether they'll cut a quarter percentage point or a half percentage point.
Historically, economic and political crises have been buying opportunities. Looking at 17 crises, ranging from President Wilson's nervous breakdown to the Gulf War, the stock market setback generally has been a short-term matter lasting no more than a few months.
The productivity gains have been stunning.
Hopefully, by August (when the Fed next meets), we should have a pretty good idea that the economy is expanding. A tax rebate and earlier cuts will be working. If the Fed cuts in August, we will worry more about them overdoing it.
The jobless rate is the best indicator of monetary policy, ... The Fed keeps cutting rates as long as the jobless rate goes up. This time around is really no exception.
Employment gains really haven't come from full-time workers. They're coming primarily from part-time, temporary help, ... Businesses are still trying to maintain flexibility by not hiring more expensive, full-time workers. That might be one of the reasons why we're seeing an increase in continued claims.
Both consumer and business confidence is depressed because of uncertainty surrounding the war, ... If we can somehow bring closure to the war situation, I would expect confidence to improve dramatically, taking with it the economy and the stock market.
Greenspan has to make sure the labor market has improved on a continuing basis before he can even think about hiking interest rates. For example, in 1992, he waited 17 months after the peak of the unemployment rate before hiking interest rates.
We're looking for the wording of the Fed's statement to change in an encouraging direction. The economic numbers would argue for more optimism than caution at this point, ... My expectation is that this economy will be sizzling in the third quarter and hopefully in the fourth quarter, and that should lead to more jobs.
If they don't deliver, we could see a sharp sell-off in markets and a drop in consumer confidence,
I'm not bullish on the holiday shopping season, but I'm not as bearish as some people have been.
Until and unless there are significant increases in jobs over a period, tighter monetary policy is out of the question.
This economic indicator continues the string of statistical signs supporting the current Federal Reserve stance, ... The recovery seems to continue, but it is still too weak to generate sufficient payroll growth for inflationary pressure.
And now that the economy is improving, people have greater confidence to make purchases and build homes.
I think we should know about candidates' desires and views, but I think it would be a mistake to assume that they will become reality.
We've been able to have our cake and eat it too -- satisfy our demand for goods and services and at lower prices,
It's pretty clear that all the pieces for capital spending are in place, including rising sales, lower inventories and increases in shipments and orders, ... So, despite what CEOs say in public, there's no question that capital spending -- outside of aircraft and telecommunications -- has bottomed and is on the way up.
The loss of confidence in the financial reporting of Corporate America could hurt both consumer and business spending, ... The reduced availability and higher cost of credit, as well as the desire to strengthen the balance sheet, could cause firms to postpone capital spending plans and accelerate layoffs.
What's lacking is confidence, so businesses aren't spending the money they have, ... That's why I don't necessarily think it takes a huge fiscal stimulus package to get the economy moving.
The third cylinder of economic growth is beginning to fire, ... The other two cylinders are inventory swings and consumer spending. Outside of telecommunications and airplanes, business capital spending has begun to improve already, beginning in the first quarter.
Dollar depreciation is good assuming it is taking place in an orderly manner. The concern is any precipitous plunge. If that were to happen the Fed would have to raise rates significantly.
More and more jobs, both manufacturing and service jobs are sent overseas these jobs won't come back any time soon.
We have a situation where the baton of economic growth needs to pass from consumers to businesses, but that hasn't happened yet,
This report is a slow boat to China, reflecting continuing business caution about hiring people. Facing unprecedented competition from both domestic and foreign sources, businesses are still focused on productivity gains with as few employees as possible.
We're going to get an economic boost from not only production, but from inventory buildup during the current quarter, and probably for the balance of this year.
Fed Chairman Alan Greenspan will have to act to boost confidence, ... Another cut at the Nov. 6 Fed policy meeting should not be ruled out, lowering the federal funds rate to 2.0 percent. Considering the weak economic outlook, the central bank will remain accommodative in the foreseeable future.
This time around, my guess is that the lead may end up being shorter than the historic average, ... I wouldn't rule out the possibility of the stock market being an almost coincident indicator.
We're still losing jobs, but the rate of loss is expected to slow, ... That, hopefully, will be viewed that the economy is starting to improve.
If they keep the word, the financial markets will like that, because the Fed has put itself in a self-imposed box. If they discard the word measured, they'll be saying they're free to do what they want.
The problem is the bottleneck. The industry simply is not able to process the applications fast enough. They (homeowners) are trying to refinance...But the increase in demand will simply increase the waiting list.
If oil goes to 50 a barrel, I think we're talking about 3 percent economic growth, rather than 4 percent growth, possibly. And the jobless rate could actually go up, not down, because the long-term potential economic growth rate is actually 3.5 percent -- we could actually be falling below potential.
Even with significant employment gains, the central bank wants to see more inflation and pricing power. The fall election is another hurdle. No hike in the interest rate is likely in 2004.
Inventories really being run down to ground, but that means that any increase in demand in the future will be translated into more production and jobs. We're feeling the pain right now, but it means we're more likely to get economic growth starting early next year.
We knew the data collected after the attack was going to be weak, but I was a little dumbfounded by the fact that the numbers even before the attack were awfully weak, ... Even before the attack, the economy seems to have relapsed into the doldrums.
The Japanese would argue that they never really intended to bend the trend of the dollar they were just trying to make sure the dollar depreciated gradually, in an orderly fashion, ... I suspect that's still their game plan.
Inflation is not an issue right now. However, it could be in the future. The Fed will begin to worry about inflation because monetary policy affects the inflation rate with a lag of as much as 18 months to two years, so they need to worry about it now.
That's one of the reasons why consumers are not going on a spending spree, though they're keeping the economic ship afloat. When higher unemployment numbers come out, that will probably rattle consumer confidence a bit.
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