Ian Shepherdson Rise Quotations

No doubt bears will highlight the rise in continuing claims, up another 29,000, but we are unmoved: A rising ratio of continuing to initial claims signals accelerating productivity growth, not a shaky recovery, ... Labor market conditions are improving -- but we still expect a soft payroll report Friday.

If this is sustained we can be more hopeful the trade deficit will not rise further,

Given the complete absence of meaningful inflationary pressure evident in the economy now, and -- as the Fed put it, 'tentative evidence of a slowing in certain interest-rate sensitive sectors of the economy' -- we think there is very little chance that rates will rise again in the current cycle.

There is no chance of a spontaneous slowing in home sales. The market will soften if -- and only if -- mortgage rates rise significantly.

Katrina and Rita effects still linger, though they are fading, ... Claims will likely rise next week as the full effects of Wilma hit, but the downward trend is very clear.

Over the next few months we expect starts to strengthen as reconstruction begins on the Gulf Coast - the rise in permits may be an early sign - but elsewhere starts still need to lag sales. Demand is still huge but there are too many new homes for sale.

It is disappointing in the wake of the huge rise in the Empire State survey -- the indexes are usually at similar levels,

There is, in short, no sign that the housing market has turned down. The lack of supply of existing homes simply means that prices will rise more quickly -- and with mortgage rates at just over 8 percent, there won't be any slowdown in home sales anytime soon.

There is, in short, no sign that the housing market has turned down, ... The lack of supply of existing homes simply means that prices will rise more quickly -- and with mortgage rates at just over 8 percent, there won't be any slowdown in home sales anytime soon.

The price index was up, ... This reflects the rise in oil prices and not much else, but that won't stop doom-mongers worrying about it. In short, the report shows manufacturing is still on track.

The rise in oil prices was always likely to hit these numbers with a vengeance, and the petroleum deficit duly rose by $1.4 billion.

The rise in (confidence) is presumably a reflection of the rebound in stock prices and -- though to a lesser extent -- the further cuts in interest rates,

These data leave confidence very close to its cycle high, and completely unaffected by higher interest rates. Together with the rise in home sales also reported today, the data sit very uneasily with Mr. Greenspan's dovish tone last week and again today.

As far as we can tell, confidence now seems to have run a bit ahead of the improvement in the stock market, and the failure of the Nasdaq and Dow to make further progress in recent weeks makes it doubtful that confidence will continue to rise at the May pace. The sharp rise in unemployment is likely to become a negative factor, too.

This is a significant decline in confidence, ... Presumably the combination of higher interest rates and stagnant stock prices lies behind the moves, but the key point is that the steady rise in recent months has abruptly begun to reverse.

Clearly good numbers, reinforcing the Fed view that much of the spring rise in inflation was 'transitory' - but good CPI numbers alone will not stop rates rising slowly.

The key number in this report, in our view, is the rise in the supply of homes for sale. There are now 14.4 percent more homes for sale than a year ago, while actual sales are up just 3.3 percent. With mortgage demand slipping a bit and supply rising, price gains cannot continue at their current pace.

The headline reflects a 3.2 percent rise in gasoline prices. Natural gas and electricity prices were also much stronger than the PPI suggested. The good news is the 0.1 percent core, which supports the Fed's view that transitory factors have boosted inflation in recent months.

The gains were uneven, however, with small declines in clothing and electronics, a decent 0.7 percent rise for general merchandise and a huge leap for non-store retailers. Provided January holds up -- surveys suggest so far, so good -- the overall holiday season will have been pretty good.

The chairman's remarks clearly signal rates will rise this month, though we remain of the view that a November hike is not yet a done deal.