I think if you take those two things together, there is some hope. |
I think the Fed felt this was not the time to be cautious and conservative. |
I think the general message here is that despite the fears about a low savings rate, the consumer continues to hang in there, and that's essentially the only thing that's going to keep the economy on track. |
I think their desired stance is to stand pat for an extended period of time rather than cut rates, unless they are confronted with an external shock to the global financial system. |
I think you would be hard-pressed to find an economist, aside from the supply-siders, who would argue against the idea that deficits matter. |
I'm expecting the Fed's next move will be to tighten. They'll do it gradually, but not for another six months -- they'll move in their June [policy] meeting. |
I'm not sure Taylor has the political savvy for the job. |
I'm not sure Taylor has the political savvy for the job. Greenspan had been in Washington a long time and had a solid reputation. It was no surprise when Volcker was replaced by Greenspan because he was the obvious choice waiting in the wings. |
If you listen to the pronouncements of about 6 or 7 Fed presidents and governors over the past week they are all saying the slowdown is real, but don't get too excited because inflationary pressures are still there. There is the implication that these numbers may be a little fluky. |
If you look around and you'd hardly notice any kind of slackening in the labor market. I find it strange that we had one of the biggest declines in employment in almost two years and no one noticed, and I'm sure they're thinking the same way over there at the Fed. |
If you look at the last jobless recovery, the Fed was on hold for a good, long time. When they did reverse course, the economy had produced 4 million jobs from the trough in the labor market. We're nowhere near that -- even with [payroll data] revisions, which I suspect will be on the tepid side, we won't be near that. |
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. |
It came in a little higher than expected, but I take it as more of the same -- consumers are hanging in, but they're not showing robust enthusiasm. |
It is a genuine shocker... I don't think anyone anticipated a decline of this magnitude. |
It's clear the consumer has progressively turned more cautious and conservative. Given that, and given that business capital spending has yet to come back, how long can this recovery keep on going? These numbers certainly make that a legitimate question. |