Anthony Chan Ate Quotations

With a fall in the yearly rise in average hourly earnings, both investors and policy-makers can avoid pushing the panic button for a little while longer. In other words, while a (May interest rate hike) remains all but assured, this report did little to nail further tightening beyond this stage.

There's a danger in being too positive, of there being a huge disconnect between how positive a policy-maker sounds and what the economy is doing. That was probably one of O'Neill's greatest shortfalls -- the dichotomy became too wide.

International investing offers the opportunity for diversification. What you want in a diverse portfolio is the ability to have some markets move differently from other markets. You get a much higher rate of return with lower risk.

Now, with the economic recovery appearing to be somewhat in place and the central bank not lowering rates, we see people trying to get in at the gates before rates start to rise.

The rise in the unemployment rate takes much of the sting away from the robust gain in payrolls from a monetary policy perspective. The big fear ahead of the release of this report was that labor markets were overheating.

He's saying so far there is sufficient flexibility that we can tolerate a higher deficit than we could 10 years ago. He didn't say ignore it.

I don't have any doubt it's going to bite. The debate is whether it'll bite enough to cause a recession, and I don't think so. Because the economy remains fairly strong, it can withstand these one-two punches. If we were growing at 1 or 2 percent and we got this same one-two punches, the ref would tell everyone to go home.

It would have been a lot more comforting to see greater strength in the ex-auto component than in the headline figure.

That report certainly reveals the recession is not over. The gains we had in September are not sustainable and illustrate why the central bank has to continue to lower rates. At this juncture, the easing of rates basically is serving as a consumer confidence booster.

When you listen to Greenspan's speech, you hear a fear about the sustainability of economic growth and no inflation pressures. Guess what that spells? Lower interest rates and postponing a return to higher rates, to insure the sustainability of growth.

Preliminary estimates indicate 60 percent damage to downtown New Orleans. Plenty of cleanup work and rebuilding will follow in all the areas. That means over the next 12 months, there will be lots of job creation which is good for the economy.

People watching the Chinese trying to generate a soft landing think that, if it doesn't work in five minutes, it must not be working. We're not seeing immediate results, but I think it's incorrect to assume that, a year or a year and a-half from now, we're not going to see some of these effects. We will.

In view of the stimulus already out there, I think the Fed will finish out the year by raising rates until the end.

It's difficult to foresee a growth rate where we will find 320,000 jobs

Given the signs of recovery in the manufacturing sector, that won't bring the economy to its knees, but it will ensure that this will be a moderate rather than robust recovery.

Any time you have a situation like this it creates opportunities for companies to clean up their attics, and that means lowering estimates and partly, or completely, attributing it to Katrina.

Corporate earnings growth is slowing. Earnings might be growing at 9 to 10 percent, and that's still impressive. But they're going in the wrong direction.

Higher mortgage rates are having the expected impact on the housing market.

We will eventually see the negative impact of rising rates -- we can't dodge that bullet -- but doesn't usually happen at the beginning of the cycle. I'm not sure we will continue to see the market beating expectations by these margins, but I don't see the market collapsing in the next month or so.

The stock market didn't want the economy to grow too quickly because they were worried about aggressive rate hikes, ... They wanted the Goldilocks approach where everything was just right. But now they realize that maybe the porridge is a bit too cold for their taste.

It now looks as though the economy is continuing to gravitate towards a more gradual pace of economic growth.

The decline in the length of the average work week ... tells us this leading employment indicator does not foreshadow any immediate end to this general pattern of weakness in the labor market.

When the economy is creating 200,000 new jobs a month, we can tolerate $65 to $70 a barrel oil. It masks the impact on consumer confidence.

With all that as a backdrop, there are some real positive forces to stimulate growth.

The lackluster change validates the Fed's view that inflation is not likely to be a major overall issue in 2004. Although this bodes well for policy, it is not a positive for corporate pricing power.

Clearly when you speak of an economic slowdown, you usually talk of an unemployment rate that is much, much higher. This environment is just not right for a recession,

Going into this report, many analysts greatest fear was that the Fed may have lost some control of this budding recovery. The actual evidence shows that a moderate recovery is exactly what we are likely to get.

The bottom line is, the labor market is going to continue to show further deterioration, not because it's getting worse, but because of mechanics. As the unemployment rate gets higher, the consumer is going to consider that.

These jobs are not lost forever. When you take into account everything coming through the pipeline, all Federal aid, all the insurance money, there will be a lot of jobs created by recovery efforts. Remember the GDP of New Orleans was about $40 billion annually before the storm. We'll easily see more than that being pumped into the system.

These jobs are not lost forever, ... When you take into account everything coming through the pipeline, all Federal aid, all the insurance money, there will be a lot of jobs created by recovery efforts. Remember the GDP of New Orleans was about $40 billion annually before the storm. We'll easily see more than that being pumped into the system.

We're starting to see the savings rate pick up from near historic levels, which is very encouraging. Though we don't expect Fed tightening to work overnight, we are starting to see some of the early results of the significant tightening we've seen to date.

The core (inflation measure), while it's up, still looks very contained. This just keeps the Federal Reserve interest rate hike engine humming along after June 30.

To the extent that consumer sentiment reacts to movements in the unemployment rate rather than the meager increase in non-farm payrolls, we have to take this ... report as delivering good news to the troops.

Rates might be low, but people are starting to realize that rates will go up. Remember you've got to get a mortgage down the line, maybe six months out when the home is complete. People are preparing for it.

Today's Fed rate cut and directive clearly reflects the fact that the Fed is coming to the end of its rainbow and therefore wants to ensure that it still can convince financial markets that it still has further flexibility to do more if it needs to.

What investors should realize is that the hostesses have been recruited to start removing the punch bowls from all Fed reception rooms and will soon be out full in force and ready to continue raising short-term rates well into 2003.

While weather played a role in soft apparel sales, the high energy prices impacted overall sales. Net-net, the climate is likely to get better with improvements in the labor market.

You're seeing inventories creeping up and affordability pinching more and more, and you're seeing long-term rates creeping up. All that suggests a trimming of housing activity.

This is clearly a non-threatening report for investors and policy makers alike. Labor market conditions appear to be tepid enough to justify less rather than more Fed rate hikes while wage pressures did not spoil the party.

Everybody knows energy prices are out of control. But to see the core number coming in line with expectations and the year-over-year figure actually declining tells me the Fed is back on plan to move at a gradual pace (of rate increases.)

Although today's employment report provides little evidence of anything resembling a double-dip recovery, it does provide stronger support for the onset of a gradual to a moderate recovery in the months ahead.

Although the BLS failed to provide an estimate of what the hurricane did to this report, my research does show that in nine out of the last 10 largest hurricanes, payrolls softened by an average of 120,000,

This gives the Fed license to continue executing monetary policy. If they see any signs of slow growth in employment, industrial production, or retail sales, they certainly have the green light to make another cut. They have total flexibility to do whatever it takes to prevent a recession.

The Fed is likely to continue to raise rates for much of the year 2005.

The Fed is justified in being aggressive. We're in uncharted waters here.

The Federal Reserve and energy prices really have the fate of the economy in their hands.

Given our forecast, we do not expect that this statistical release will have much impact on the policy debate when the Fed meets,

I think this is an important first step for the central bank. They didn't want to lower rates too aggressively for fear of sending a signal to the markets that they thought things were completely falling apart.

The small improvement in labor market conditions, despite the continued risks that remain on this front, do suggest that even with all the caveats that Greenspan echoed in his latest testimony ... the Fed might be inclined to move towards a neutral risk bias.

The significant number of headwinds such as rising energy prices and the prospects of rising short-term rates are taking their toll on the economy,

When we see a change in payrolls that is dominated by a glitch in the seasonal factor, no change in average hourly earnings and only a small gain in the length in the average workweek, we know that the message is encouraging but not exhilarating,

The unemployment rate is picking up, but it's picking up at a very slow pace,

More rate cuts may not be forthcoming, but the Fed is also not likely to start raising rates as quickly as financial markets expect.

The CPI report continues to be encouraging. These numbers are stimulating consumer spending by giving consumers more spending power. At the same time, lower inflation will also encourage the central bank to do whatever they need to do.

The CPI report continues to be encouraging, ... These numbers are stimulating consumer spending by giving consumers more spending power. At the same time, lower inflation will also encourage the central bank to do whatever they need to do.

He not only was articulate in his views, but justified his views without making financial markets balk. He was impressive, maybe not as impressive as Greenspan, but Greenspan had 18 years to practice.

These numbers give the Fed license to cut rates as much as necessary.

These numbers are suggesting that a future Federal Reserve tightening will be coming to a theater near you quite soon.

Yes, Greenspan does admit the obvious, that the real federal funds rate has risen considerably, but he quickly concludes that the rate 'remains fairly low'. This is Fed-speak for the notion that the Fed will continue to raise rates by a quarter percentage point...as far as the eye can see.

I think this report clearly shows that we got a hurricane bounce back. It also puts the possibility of a Fed rate hike in December back in play.

In other words, before the end of 2002, the Fed should signal that their upward rate moves were just a warm-up for what we can expect in 2003.

I don't think the recovery is in danger. But I think what we have here is a situation where the Federal Reserve will probably look at the numbers a lot more closely. If we see another two or three economic statistics that surprise us, yes the Fed can pause and not raise rates in August.

I think the (PPI and core PPI) numbers will make the Fed a bit more comfortable that the status quo is fine, ... The core PPI is the one they really care about. It's really telling us that the inflation story is not running away from us. That doesn't mean the debate won't be heated. But this number does tilt the apple cart.

I think that if the Fed goes back to normal language about 'measured pace' (of rate hikes), it becomes a secondary story, ... It is only becoming a big story because of the uncertainty about what they were going to do. The equity markets will be looking for language here again. If it talks too harshly about inflationary pressures, it could be unfriendly for stocks.

I think if we get another 0.3 rise in the core CPI, I think the Fed will want to draw line in the sand, ... The Fed statement shows there are a lot of anxious parties at that meeting willing to be (more) aggressive.

Despite the fact that the unemployment rate remains low relative to prior economic downturns, the burden on the unemployed population has been the most severe, by one measure, since at least 1972.

It will cause something like a state of paralysis on the part of consumers, at least in the near term.

But what we've seen is if you hit the economy over the head enough times with higher energy prices and short-term interest rate hikes, it reacts.

This will certainly heat up the debate at the central bank,

Usually the devil is in the details. With this report, the greatest fear is that details of true labor market conditions will be found over the next couple of months instead of in this report.

With the surprise jump in new home sales and the outsized rise in existing home sales, we now see that widespread talk of the demise of our moderate economic recovery has been somewhat exaggerated.

The problem was that we had earnings growing at a high multiple of economic activity, and that wasn't right. There was a considerable amount of pressure for companies to exaggerate economic activity, but the economy was doing just fine.

Weaker consumer confidence threatens to reverse the course of the recovery. That's why policy makers will be so cautious. They don't really have to worry about the economy's fundamentals, but they do have to worry about confidence.

It could raise expectations of a pause (in Fed interest rate hikes) after the August meeting,

The good news is that if so many people are entering the labor force it must mean that they are perceiving an improvement in the economy's prospects, ... The bad news, however, is that if too many people become optimistic about their job prospects, then the unemployment rate will continue to push higher. And the higher unemployment rate does have a damaging impact on consumers. They see it and they think, 'I shouldn't be spending money.' That's one of reason the unemployment rate is so important. It's the one that drives what happens on main street.

Several times in the last year we've seen mortgage rates creeping up and housing hasn't responded. Now the Federal Reserve has put some credibility behind the increase in rates. I think it set a general tone for the housing market that it'll be a lot more muted.

This is an economy coming back, but it's going to be a moderate recovery. But we should not despair, since a balanced recovery has the best chance of turning into a longer-lasting recovery.

The recovery of 2002 looks poised to mirror the recovery of a decade ago, with a moderate economic and earnings recovery following a short and shallow recession.

Mortgage rates will put a little bit of a brake on housing activity, ... but it may come precisely as other sectors start to turn around.

There's no question these higher mortgage rates will take some of the shine off the resiliency in the housing market,

I really don't see a ratcheting up of concerns for the Fed. I still think they are concerned enough that they'll do two more rate hikes, but I didn't see anything in this report that would suggest that they need to do more.

What the Fed showed was that extraordinary circumstances require an extraordinary strategy. Not only are they moving rates to lows not seen since the early '60s, they're prepared to move them a lot lower.

New Fed chairmen like to come out of the gate looking hawkish as they try to formulate their credibility. Then, they go back to looking more dovish.

The impact of higher energy prices is starting to bite corporate America. It's either going to raise costs or lower demand.

With this figure, markets can remain all but assured that the Fed will continue to push short term rates higher well into 2006.