As far as the Fed is concerned, payrolls growth is probably just about right -- not too hot and not too cold. |
He has been careful to address all possible concerns about his leadership in Congress, in financial markets and among his Fed colleagues. |
I do not expect core inflation to rise much above these levels. But were it to do so, this would seal the case for more rate rises. |
It is not clear exactly why confidence is falling but it may have been dented by concerns over the cooling housing market. The contrast between the buoyancy of current economic conditions and caution over the future is now the sharpest since 9/11. |
It is quite sensible for them to sit back and see where they are. |
Since the order books at Boeing are bulging at the moment, with many of those orders coming from abroad, aircraft exports could continue to be a big positive for the trade deficit for some time to come, |
Since the order books at Boeing are bulging at the moment, with many of those orders coming from abroad, aircraft exports could continue to be a big positive for the trade deficit for some time to come. |
Such a rapid escalation in prices is sure to hit confidence and real spending hard. |
That rebalancing now looks considerably less likely. |
The bottom line is that a current account deficit of this unparalleled magnitude is unsustainable and there is no hope of it being resolved painlessly through higher exports alone. Instead it will require a big dollar depreciation alongside much weaker domestic demand for imports. |
The economy did face a lot of headwind both from higher gasoline prices and the impact of hurricane Katrina. |
The jump in import prices will fan the new-found fears of inflation in the markets and at the Fed. |
The slowdown in the pace of job creation |
The wider impact of Hurricane Katrina on the national economy is now becoming evident and none of it is pretty. |
This is all a bit of a puzzle, ... It will depend obviously on how quickly these areas can be repopulated, and also you've got the positive of reconstruction spending and the fact that that will create jobs. |