Productivity growth is slowing and it is not strong enough to forestall rising labor costs and broader inflation. |
Profits as a share of output are close to 10 percent. That's as high as they've ever been. |
Recession risks are rapidly rising. |
Reintroducing a little uncertainty in the bond market would be desirable. Long-term rates are too low, |
So far, it's weakening, not caving. But it's been a tricky policy to deflate housing, not crater it. |
So far, the surge in oil prices has yet to do any significant damage to the broader economy. We may see some softening in the consumer spending numbers soon, but unless that translates into a weaker job market, the economy should be able to weather these higher energy prices. |
Some 20 percent of the nation's refining capacity seems to be right in Rita's path. If that gets disrupted at all, then gasoline, jet fuel, natural gas and home heating oil will surge higher. |
That's a healthy pickup. The pendulum, which had been fully in favor of employers, is swinging back in favor of employees. Employees are starting to gain traction. |
That's right where the Fed would like to see it, ... It would take a good year of that level of monthly growth before the job market tightens to the degree where inflation concerns would become more paramount. |
The baby boom echo generation is now in their mid-teens, at a time when demand for electronics is very high. And they're old enough now to put pressure on their parents to ante up. I know that from personal experience. |
The bloom is definitely off the housing rose. Housing peaked last summer and has been weakening ever since. |
The consequences are more serious. Right now there is zero margin for error. Nothing can go wrong. |
The data is going to look ugly in the next couple of months. |
The economic data in the next couple of months will look pretty weak. There will be significant political pressure on the Fed not to tighten. |
the economy has weathered these storms about as gracefully as could be expected. |