John Silvia Pending Quotations

The question is often asked: When will capital spending kick in? I answer that it already has.

Defense spending tends to be very lumpy in terms of the quarter in which it hits. When you're in the middle of a war, you have to have goods delivered. But even if it had been 3.6, it would still be respectable growth.

We definitely have to figure that once tax filing season is done and tax refunds are cashed, we do expect consumer spending will slow down in the second half of this year, ... I don't see any way to fudge that (higher financing costs). You're not getting the employment gains or wage and income gains to offset that.

Employment and wages are stronger and therefore, consumer spending is stronger. Housing is slowing, but not as much as we would have expected, and the price of oil is so far not having that big an impact on the consumer.

The rate of spending is less than you would have expected given the typical business cycle. Companies have made a lot of money, but if you look at equipment and software spending, this cycle is below the pace of the past three or four cycles.

Consumer sentiment numbers are not reflecting economic sentiment, but political or social sentiment. If you were generating an economic forecast of spending from these numbers, you'd be totally wrong.

They view the gasoline thing as temporary, and that's important because it didn't change their overall pace of spending. And that's a different kind of psychology. If it was a permanent increase in gasoline prices, then you would have expected consumers to make a more permanent adjustment downward in their spending and saving rate.