Ian Shepherdson Level Quotations

The revisions are not as big as we feared, ... The new April number shows sales at their lowest level since November, but the previous four months were exceptionally strong, in part due to favorable weather. Given the strong trend in mortgage applications, these data likely do not signal real housing weakness.

We believed the underlying level of claims peaked in the spring. This suggests that they may now genuinely have begun to decline.

With unemployment set to breach 6 percent over the next few months, people's view of the current economy is bound to deteriorate, ... But expectations are what matter for spending, and at this level the numbers suggest consumers spending will rise, albeit not rapidly.

July sales always looked unsustainably high relative to the level of mortgage applications so a correction was due. This drop in sales does not mark the start of a sustained weakening.

The trend in claims has risen this year, in tandem with the clear drop in business confidence in the period before the war with Iraq. If claims are sustained at this level they will signal an acceleration in the rate of net job losses recorded in the payroll numbers.

By early next year we expect starts to have begun to decline, though activity can probably remain close to current levels for another couple of months,

Skeptics will argue this is just a post-war bounce that won't last, but we disagree, ... The ISM was in the mid-50s before the war, thanks to very loose policy, and there's no reason why it can't return to those levels very soon. The Fed does not need to ease again.

It is just too soon to be sure that the second-quarter slowdown will be sustained, ... The level of consumer confidence is still consistent with 5 percent spending growth.

Mr. Greenspan said next to nothing about the current economic situation in his testimony, ... does not sound to us like a signal he has changed his mind on the appropriateness of the current level of interest rates. The rest of the testimony was a clear and unambiguous plea to Congress not to abandon fiscal discipline.

It now appears that the trend in jobless claims is stabilizing at about 400,000 per week, ... This is well above the trend level at this time last year, but it is no higher than in the spring. This means that layoffs are continuing at a rapid pace, but they are not accelerating.

This level of the ISM is not consistent with recession,

Unfortunately, at current levels, and coupled with the extraordinarily low level of labor demand, the claims numbers are still consistent with flat or falling payrolls and a rising unemployment rate. There's no real relief in sight here yet.

At 296,000, claims have slipped back to a five-week low, ... This is simply too low a level to be consistent with a major change in the labor market.

At this level the index is consistent with spending growth of about 3.5 percent, in line with recent economic data. But watch out for a dip next month in the wake of the renewed spike in gas prices. Overall, though, quite robust.

Looking forward, we can be unequivocal: New home sales have to fall, because the level of demand for new mortgages for house purchase recently has not been sufficient to sustain current sales rates.

It is tempting to argue that two straight months of sales nearer to the 900,000 level than one million...is evidence of a real slowing in housing. But it probably tells us more about the awful weather across much of the country,