The question the Fed now faces is what will happen to growth looking forward in the wake of a 75-basis-point tightening? |
The rebound in expectations since October is still big enough to signal strong first-quarter consumption, but not a sustained boom. |
The renewed strength in home sales reflects lower mortgage rates; we expect rates to dip to a 14-month low this week. The housing rebound will ensure construction sector strength in the first quarter of 2001. No recession here. |
The report suggests that industrial orders are trending higher as manufacturing recovers from the Asia crisis, ... There are no real signs of a slowdown. |
The report suggests that industrial orders are trending higher as manufacturing recovers from the Asia crisis. There are no real signs of a slowdown. |
The revisions are not as big as we feared, ... The new April number shows sales at their lowest level since November, but the previous four months were exceptionally strong, in part due to favorable weather. Given the strong trend in mortgage applications, these data likely do not signal real housing weakness. |
The rise in (confidence) is presumably a reflection of the rebound in stock prices and -- though to a lesser extent -- the further cuts in interest rates, |
The rise in oil prices was always likely to hit these numbers with a vengeance, and the petroleum deficit duly rose by $1.4 billion. |
The statement leaves room for inaction in November if the data fail to thrive. |
The surge in activity is a lagged response to the strength of new home sales, and with mortgage demand now well off its highs -- though still strong -- it probably can't last, ... But there is no reason to expect an immediate plunge, not least because permits rose again in February, for the fourth straight month. |
The survey has a good track record and the signal it is sending cannot be welcome at the Fed. |
The trend in claims has risen this year, in tandem with the clear drop in business confidence in the period before the war with Iraq. If claims are sustained at this level they will signal an acceleration in the rate of net job losses recorded in the payroll numbers. |
The trend in sales is probably not as weak as this seems to suggest, but there is no question that the condo/co-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. |
The true underlying trend in claims is downwards, but it is slow. |
The underlying trends are still adverse, however, and the deficit will rebound next month. |