Ian Shepherdson Sum Quotations

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,

Clearly, these headlines will assuage some of the fears of a consumer collapse, and they mean the Fed will wait till the meeting before easing again. We still look for at least a 25-basis-point easing on Jan. 31.

Given the huge decline in consumer confidence, this (gain in spending) does not seem unreasonably weak, especially with consumers' real after-tax income growth slowing too.

People told consumer surveys they were miserable, but they were willing to borrow money to pursue a bargain,

With unemployment set to breach 6 percent over the next few months, people's view of the current economy is bound to deteriorate, ... But expectations are what matter for spending, and at this level the numbers suggest consumers spending will rise, albeit not rapidly.

Strength is broad-based, confirming that what consumers do can be very different to their responses to confidence surveys.

We fully expect sentiment to drop sharply, putting in place the conditions for much softer consumer spending numbers.

The Fed's chief worry is still the labor market. So long as the unemployment rate does not fall further, and clear signs of consumer slowed own emerge, the Fed will be able to leave rates on hold.

The Fed's chief worry is still the labor market, ... So long as the unemployment rate does not fall further, and clear signs of consumer slowed own emerge, the Fed will be able to leave rates on hold.

Looking forward, we think there is next to no chance these numbers mark the start of a real slowing in consumer spending. The markets will no doubt take comfort from the headlines, but it is temporary relief.

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.

The trend in sales is probably not as weak as this seems to suggest, but there is no question that the condo/co-op market is slowing much more dramatically than the market for single-family homes. Even in the latter case, however, sales have fallen more than 10% from their summer peak.

We remain of the view that the Fed's near-term objective is simply to support the stock market until consumer and business sentiment improves,

It is just too soon to be sure that the second-quarter slowdown will be sustained, ... The level of consumer confidence is still consistent with 5 percent spending growth.

Ignore the ISM at your peril, ... Assuming this report is not a fluke - everything we look at suggests it is very real - it is consistent with year-over-year GDP growth accelerating to 4 percent by the summer.

Now the question is whether sales can hold up in the face of lower consumer confidence,

We are not forecasting a recession, but there is some truth to the notion that negative news can be a self-fulfilling prophesy. If companies expect demand to slacken, they scale back production. And if consumers expect doom and gloom, they scale back spending. That's just the way it works.

We expect a couple of very rough months for consumers spending.

The January revision is mostly due to the plunge in aircraft orders reported in the durable-goods numbers. In February, the index was pulled down by lower consumer confidence, higher jobless claims, shorter delivery times and lower building permits.

If real spending rises at this pace in February and March, consumer spending will rise just 2.3 percent for the quarter, the softest since Q2 1997,