Ethan Harris
Ethan Harris
cases companies cutting growth hours looking numbers obviously payroll people reflect slower workers workforce
We are obviously experiencing slower growth and the payroll numbers don't really reflect that yet, which is why they will be an important indicator. Companies have been cutting back the number of hours their workers put in and in some cases cutting back their workforce altogether, and that is what people will be looking for in the numbers.
chance cut fed four gone hold might months period rates reasonable sitting
We've gone from a period where there was a reasonable chance the Fed might cut rates just four months ago to one in which the Fed is very much comfortably just sitting on hold for now.
budgets capital cut demand dramatic point quite spending
Firms have cut back on their capital spending budgets to the point where some of them are not even replacing worn-out equipment. It's been quite a dramatic pullback, and in some sense there's some pent-up demand out there for capital equipment.
average bills bulk burden confidence consumer cut debt driver growth leaving less past paying people picking several slow taken tax truth wage
Everyone is all zeroed in on the consumer now, but the truth is that the consumer isn't the driver now. Confidence is picking up, but still at average levels. Wage growth is slow and the bulk of the tax cut is already in place. Finally, with all the debt people have taken out over the past several years the burden of paying monthly bills is leaving less for discretionary spending.
best cuts economy maintain move promise quarter rate remains
The best tack is to move by a quarter point, with the promise that there will be more cuts to come if the economy remains weak. You can't maintain that promise with big bulky rate cuts.
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The one thing that companies can do quickly without laying people off is reduce the number of hours per week; as the economy slows, that's the natural place for a company to cut back. It's a little harder to pull back quickly on job hiring.
christmas cut rate shapes wait
They'll wait to see how Christmas shapes up, and if it's weak, they'll give another rate cut in January.
attitude economy happened screw state trying
What's happened between now and then is that we've accomplished everything we've set out to achieve, ... Then they were trying to get the economy to the state it is in now, so the attitude now is, 'lets not screw anything up.'
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With few signs that consumer prices are about to break to the upside ... along with signs that aggregate demand remains robust, we expect the Fed will not only vote to keep rates constant, but will leave the growth and inflation bias statements unchanged.
benign inflation remain
We think inflation is going to remain benign going forward.
drop fed language number reasons
We see a number of reasons for the Fed to drop its 'measured pace' language.
claims continued people rate sign work
These continued claims are a sign the unemployment rate is still on an upward trajectory. There are still a lot of people out of work out there.
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Fed officials ... likely anticipated some fallout in fixed income markets, ... We believe ... that Fed officials wanted to signal a greater probability of tightening in 2004 than had been priced into markets.
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Real estate is a topic that has vaulted to center stage, ... The real reason the topic is hot and belongs on the front page of research reports is that the housing market is becoming more of an engine of economic growth, but is also the biggest risk to future growth if the boom goes bust.