Maury Harris Market Quotations

We are seeing a 'soft landing' rather than a 'hard landing' in consumer spending for a couple of reasons. First, although job growth is slowing, wages are still rising, with average hourly earnings up 0.4% in October. Second, despite recent stock market turmoil, consumer spirits are holding up reasonably well.

Today's FOMC statement did not add any new specificity or much elaboration, and the initial reaction in the bond market has been limited.

Through the volatility, the trend in claims is gradually downward again, consistent with the labor market slowly starting to regain momentum after a setback in late 2002.

The bond market has been moving on two things today: the movement of stocks and this speculation about the yuan.

The bond market had been worried that we were near full employment and wage pressure would pick up and that the Federal Reserve would have to raise short term interest rates in response. But now that the all important employment cost index was up just 0.6 percent, the Fed doesn't need to raise short term rates because the economy is slowing down.