He can't sound bullish and he can't sound bearish, ... He has walk a very fine line to justify maintaining this measured status quo.
We're not going to get the 1.5 percent productivity growth necessary to produce all those jobs. Such a fall-off would be out of line with what normally happens.
Wages have stagnated over the past couple of years; employers have no incentive to change wages. Eventually we will see incentive packages moving more closely in line with growth in the economy, but it's not going to happen soon.
The report is certainly encouraging. It says there's no urgency to panic about inflation. But that's not the same as saying there's justification for a pause. This is all pre-Katrina. There's enough pipeline pressures out there to say that a pause is not a slam dunk.
keeps the Fed tightening engine humming along and does raise the possibility that a more aggressive posture could be adopted somewhere down the line if the inflation indicators continue to surprise to the upside.
It would have been a lot more comforting to see greater strength in the ex-auto component than in the headline figure.
The key number was not the headline (overall CPI) number,
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.
The bottom line is that consumers experienced a soft patch in the first quarter and they appear to be emerging from it,
The headline number is encouraging, but if you strip out the volatile components and look at core growth, it's telling you we're turning the corner, but we're not running around the corner.
This was low because of lower energy prices. I don't think that's a decline we can expect to continue.
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.
The bottom line is that Wall Street will have to shave off some of its overly exuberant fourth-quarter real GDP estimates,
This big decline may seem a little on the aberrant side, and we have to be careful about it, but at least some of it has to be real.
You've got to ask yourself, will we have another 100-to-150 basis-point decline in mortgage rates? ... I would say that's a stretch, so it's not going to be a reliable source of funds for consumers -- we'll need to see the economy turning around.
Even though the headline number came in much stronger, it isn't the number investors are going to be focusing on.
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.
The decline in hours means the economy will be limping along once again. Every tenth of an hour lost has the same economic impact as losing 200,000 jobs.
I think a 0.2 percent decline in economic growth due Katrina's impact on oil and the regional economy is a realistic assumption,
The outsized gain in housing starts was influenced by the same variable dominating most of the other headline stats like the retail sales and industrial production, namely weather. Everyone knows that housing starts is a volatile number that generally reports wide swings.
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.)
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.