Rising unemployment, ironically, contains good news. It signals people who had given up and dropped out of the work force are back looking for jobs. Clearly, they have hope there are jobs to be found. |
Santa's workshop will be operating pretty much at full capacity. There just probably won't be much elf overtime. |
Sooner or later rates will have to come back up to at least a 'neutral' level. But for now they've got the monetary policy lever just about where they want it, and it makes sense to do as little as possible for as long as possible. |
The advance GDP report is a funny animal. It's a combination of data that's already out there combined with official guesses. There isn't a lot of real new news. |
The bottom line is, any number over 50 is encouraging. The fact that it's a little less than the consensus was expecting I don't think is that big of a deal. |
The economy is neither roaring nor stalling; it's clearly out of the soft patch and moving along at a decent pace, and that's all the Fed needs right now. |
The fact that prices have come down makes people feel better and they think the future looks better. |
The Fed chairman has a lot of latitude to do things the way he wants to. I don't see why he wouldn't carry the day the way he wants to. |
The good news for workers is that productivity growth cannot continue at this pace. Demand will translate into jobs very soon, and in fact I think it's happening right now. |
The Greenspan Fed has inaction down to a fine art. They stood by through much of the late 1990s, allowing a very beneficial reduction in unemployment without suffering any inflationary consequences. When they do have to move, they do so quickly and surgically. |
The headline number is absolutely kind of a shock, I think the bond market is probably overreacting. It's a bounce back from September, but we're still not gaining back all the ground lost in September. The underlying trend is still kind of down. |
The inflation threat has receded yet again. I can't see the Fed moving now at least until early next year. They have almost no evidence of inflationary pressures and there are hints that the economy finally is slowing. |
The moment they think there are jobs there, they'll be out looking and the employment rate will start heading up again. I think that's on the whole a good sign at this point in the cycle. |
The retail sales number is perhaps more important than it would look at first sight. Since we're coming so close to the Christmas shopping season when most of the retail sales of the year happen, anything that represents a gauge of consumer sentiment and consumer buying patterns is going to be latched onto by the retail industry as an important indicator. |
The rise in wages of 6 cents might cause jitters, but wage inflation is less of a worry now, especially with productivity still growing at a healthy clip. As the economy slows, the unemployment rate will continue to inch up and wage pressures should ease further. |