Many economists will end up eating humble pie this weekend because, while the relationship between the weekly initial unemployment claims and non-farm payrolls is fairly robust, we should also realize that it is not always a stable relationship from month to month.
What investors should realize is that the hostesses have been recruited to start removing the punch bowls from all Fed reception rooms and will soon be out full in force and ready to continue raising short-term rates well into 2003.
The stock market didn't want the economy to grow too quickly because they were worried about aggressive rate hikes, ... They wanted the Goldilocks approach where everything was just right. But now they realize that maybe the porridge is a bit too cold for their taste.
Rates might be low, but people are starting to realize that rates will go up. Remember you've got to get a mortgage down the line, maybe six months out when the home is complete. People are preparing for it.
The best way to describe this report is 'holy cow,' ... This is a great report. We have Alan Greenspan a little bit worried about inflation and certainly the financial markets will realize that those worries certainly continue to prove to be unfounded.