The economy has begun 2006 with plenty of momentum.
I don't think it's the case that we suddenly turn off the tap, and consumer spending stops dead in its tracks. It's more gradual.
We are now at the point where Hurricane Katrina's effects are adding to job creation rather than detracting from it.
Energy prices were rising before Katrina hit, and while those costs didn't make their way through to finished goods in August, we have to expect higher core inflation in coming months. Firms are saying that they've absorbed so much already that they have to pass on these costs.
It is possible that the hurricanes that hit in August and September had a bigger impact on measured GDP growth in the fourth quarter than in the third. ... The hurricanes probably dragged on investment, too.
The reason (recession) gets mentioned . . . is that (energy price) movements of this sort of magnitude usually would be associated with recession. So you do have to start asking the question, ... The question needs to be asked, even if we think things are different on this occasion.
That's given them a source of funds to keep spending.
It wouldn't be unusual at all for them to stop and start again.
We believe the numbers today are confirming our view that growth will be soft throughout the rest of the year.
Growth was very good in the third quarter. We really suspect that the last two reports greatly understated the underlying strength of the labor market.
