Ken Goldstein Strong Quotations

The underlying story here is that we have this strong job growth, ... if we continue to have strong job growth - and I think we will - then we will continue to see those wage levels push up.

The balance will eventually change, but these numbers suggest the caution businesses have been showing is warranted. They also say we might be waiting until early 2004 before we see much stronger business investment.

Consumer spending remains the mainstay of this weak economic recovery. With tax cuts enacted, the consumer is likely to continue hanging in there. But a real recovery, including a slowdown in layoffs and the opening of new jobs, is far more dependent on recovery in (business) investment than on stronger consumption growth.

Consumer income remains very strong and now there are bargain prices for a lot of new products that are just coming out to the market, big new computers, new DVD audio equipment,

The recovery in the leading index could indicate that the economy is poised for growth by late summer. There appears to be enough economic demand to end the slide in industrial production, though no strong rebound appears in sight.

Part of the real story here is that, through July, producers were still getting more output, with fewer labor hours put in. Productivity in the third quarter is probably going to be stronger than in the second quarter, confirming the idea that, while the stock market's not in good shape, the overall economy's not that bad.

The strong signal from the indicators means that the recession could be over soon. Three successive monthly increases, each larger than the one before, bring the level of the leading series above the pre-recession peak.