Ethan Harris
Ethan Harris
lined
This is one of the very-easy-to-interpret reports. In this one, everything lined up like the planets.
best confidence corporate economy evidence gaining looking news side
What we're looking for is evidence of the corporate side of the economy gaining confidence and making real commitments in its own spending. There, I'd say the news is at best mixed,
benefits consumers economic job labor market reasons recovery spend sustain
Ultimately, for the economic recovery to sustain itself, we have to see the labor market improve. As the tax-cut benefits fade, consumers will look for more fundamental reasons to spend money, and there will have to be some job growth.
across auto collapse component growth incentives knew major months number rest row sales single stop weak
We knew we would have a very weak number because of a collapse in auto sales after two big months in a row and the incentives kind of stop working ... But if you look at the rest of the report, every single major component was up. It was very broad-based growth across many components.
assuming bond fed gets hikes market pulled
What we're assuming is that as the Fed hikes rates, the bond market gets pulled along.
below model point reached trust
We reached the point where we don't trust our model anymore. That's why we were below the consensus.
against central err feeling restraint side
Our feeling is that because you have a new central banker, they are going to want to err on the side of restraint against inflation.
adjusted bring consumer impact rates rising slowing spending tremendous
Rising rates could have a tremendous impact on slowing consumer spending. Consumer spending has been about 6 percent, when adjusted for inflation. Rising rates could bring it down to 2 or 3 percent.
below relief sigh whisper
Payrolls were well below the whisper number, so there's been a big sigh of relief in the market,
benefits lower tax
That basically, in my mind, cancels out the benefits of the lower tax rates,
both giving household payroll quarter rule survey thumb weight
My rule of thumb is to look at both the household and payroll surveys together, giving three-quarters weight to the payroll survey and one quarter to the household survey.
again begins believe continue ease fed forced hike hiking rate until worry
We now believe that the first Fed rate hike will not come until December, and we continue to worry the Fed may be forced to ease again before it begins hiking rates,
chairman proving whoever
Whoever is chosen, the new chairman will go through a proving period.
data dictate economy further gradual inflation markets risks step stop strong towards
It is gradual step towards a little more flexibility. Inflation, the economy and the markets will dictate how much further they go. They say the economy is strong and that inflation risks are tilted a little to the upside. There is nothing yet in the data that will stop the Fed.