Volumes are still strong enough to generate a few new factory jobs amid robust productivity gains. Moreover, capital spending appears to be on track for another solid contribution to third quarter GDP. |
We are looking for a very dismal report, |
We still expect economic activity to slow over the next several quarters as consumer spending slows further and housing declines more because of higher interest rates and energy costs. The absence of inflation will be welcomed at the Federal Reserve. |
Weakness in the composite index suggests that economic growth will slow over the next three to six months. |
Weakness was widespread, extending the period of pronounced weakness. |
What they did imply was that future Fed actions will become even more data dependent, Further tightening cannot be ruled out. |
While a portion of this strength is due to unseasonably mild winter weather, it is obvious that higher interest rates are, so far, having little dampening impact on construction, |
While a portion of this strength is due to unseasonably mild winter weather, it is obvious that higher interest rates are, so far, having little dampening impact on construction. |
While good gains in productivity are economically favorable, it is not a good situation when this occurs because labor input is declining more rapidly than output. |
While some of the decline was related to the effects of Hurricane Floyd, the fact that all four regions fell suggests that higher mortgage rates are also having a constraining effect. |
While the auto sector appears to have corrected its inventory overhang, other sectors have not been nearly as successful, particularly high tech, ... As business sales slow, it will be even more difficult to bring inventories into line. |
While the housing sector is slowing, almost all of its weakness will be offset by the improving factory sector, ... More interest rate hikes will be necessary to slow the economy sufficiently to alleviate the Fed's fears of building inflationary pressures. |
While these data will be welcome by the (Fed), two key questions remain, ... Will the second quarter spending slow down extend through the rest of the year? Economic fundamentals suggest they will. And will the spending slowdown be sufficient to relieve pressure on labor markets and inflation? At this point, that is still an open question. |
While these data will be welcome by the (Fed), two key questions remain. Will the second quarter spending slow down extend through the rest of the year? Economic fundamentals suggest they will. And will the spending slowdown be sufficient to relieve pressure on labor markets and inflation? At this point, that is still an open question. |
While this will not force the Fed's hand at this week's meeting, an August tightening remains a real possibility. |