The U.K. tried to cool off the housing market and slow their economy a bit, and they're caught in a situation where the economy is slowing but inflation isn't mostly because of oil prices, ... It's a bit of a dilemma, and that's reflected in their split vote.
The fact that we're not getting a spillover into the rest of the economy is pretty good news. The question that core inflation asks: Is the price of everything going to go through the roof? So far the answer is no.
The typical pattern with a natural disaster like this is that the regional economy gets clobbered but you can barely see it in the national statistics. This time it is very different because of the impact on the energy infrastructure.
This is bad news, but it's old news, I fully expect the economy to bounce back strongly in the first quarter.
The fundamentals for strong capital spending remain in place - record corporate profits and an economy that will post solid growth.
A strong economy and post-hurricane reconstruction boosted growth in November and could keep housing strong through early 2006.
Once you take out the impact of Hurricane Katrina, demand for manufactured goods remains pretty robust. The underlying strength in the economy is still pretty good.
The economy is on a somewhat stronger growth trajectory.
The problem is the combined effects of the disruptions from Katrina and Rita, plus the ripple effects in the economy from higher energy prices,
Because the economy is strong and job growth is strong, the consumer has not felt much pain, but that is likely to change in the next few months, ... I think we are headed for a period of economic weakness mostly related to the oil situation.
This is an economy where airlines are paying record prices for jet fuel, and yet it is very hard to pass through those costs.
The labor market is growing at a pretty good pace. We're clearly seeing a rebound in the economy from the soft spot we experienced in the fourth quarter, and I think we'll see payroll growth similar to last year.