We're nowhere close to the Japanese example. When you have real deflation as they have in Japan, consumers expect prices to be lower, and they defer purchases, which makes the spiral worse. That's not an apt description of what the American consumer has been doing.
More Quotes from Wayne Ayers:
Inventories are at rock-bottom levels -- even if economic growth slows in the fourth quarter, those inventories will have to be rebuilt, otherwise businesses risk losing business.Wayne Ayers
Productivity growth helps keep inflation at bay and allows real incomes to grow, but it makes businesses even slower to hire than usual.
Wayne Ayers
I think the Fed felt this was not the time to be cautious and conservative.
Wayne Ayers
The second half will show some better growth. Will that be sustained past the second half For that, two things have to happen we have to see a pickup in business spending, and the labor market has to stabilize and improve, creating permanent employment. We don't expect to see that until year-end.
Wayne Ayers
Firms in the past year have continued to invest in equipment and technology to improve productivity. And with good reason -- the cost of capital is below the cost of labor.
Wayne Ayers
I suspect they will not have a neutral bias they will indicate risks are on the downside. I think we will, on the production side, see better numbers in the second half of this year, but I don't expect any convincing improvement in the labor market before early next year.
Wayne Ayers
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