They've got more room to move, and they will move. That's what they've always done in past recessions and what they'll do again. |
This is corroborative evidence that the economy is white-hot. For this late in the cycle, it's unprecedented, but we will probably see growth back off a bit in the first quarter. |
This is the third decline in the last four months. Again, it's worrisome, but not surprising. |
This liquidation has been so sharp, so severe, not just in this last quarter, but over the past year, that even with a modest pickup in demand, production is almost bound to increase as we move through the balance of this year. |
To me, the business cycle is working as it always does, absent an external shock. Inventory liquidation means firms have to increase production, and they're already doing that. They're also increasing the length of the work week and hiring temporary workers. All these things support income and spending. |
We are not going to see the strong increases in productivity that we've become accustomed to and I think we're at that point now and that's the message in these numbers. |
We expect the labor market in the next five months will first stabilize and eventually improve, but it's probably just stabilizing now. We're still six to eight months away from convincing upturns in job creation. |
We'll probably have a moderate-paced recovery. I couldn't agree more with the Greenspan's forecasts that it would be a sub-par recovery. |
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. |
We're seeing on an almost daily basis signs across all sectors that this recovery is for real, and this trade number is confirmation of that. We've seen a pick-up in imports, indicative that the economy has turned the corner. |
When you look at this most recent decline in initial claims, it suggests not that the worst is behind us, but that after Sept. 11, unemployment telescoped. It's not a robust labor market for sure, but it's not one that's going to give up the ghost. |
You can't read too much into any one number, but it's a sharp rebound from the lows of October. Given that and a few other things, the bond market's more recent expectation is that the Fed, if it's not finished, is close to being finished. |
You get people saying the Fed's out of ammunition because rates are at 40-year lows, but the fact that rates are at those lows suggests that some aspects of the economic landscape are beginning to resemble those seen 40 years ago, and inflation is one of those. |