John Silvia
John Silvia
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We avoided the sticker shock from high heating bills in October because it was so warm. If it stays warm through Thanksgiving, we should have a good holiday shopping season.
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The recent decline in crude oil prices took out a little bit of the peak in energy cycle. But the fundamental underlying price is higher than it was a year or six months ago.
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I think if you had $70 oil, and the Fed were to continue to raise interest rates to fight inflation, that could cause a problem, ... I think there's a certain breaking point where that the price of energy alone is so high that it changes the psychology of both businesses and consumers. I think $80 would probably break the back.
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It appears as if when consumers are faced with higher gasoline prices, they continue to spend their money,
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Job gains were clearly below expectations and trend. There may be some bounce back next month in specific sectors. Slower job gains may also reflect the impact of higher oil prices and uncertainty in the spring.
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Inflation gains remain modest but they are gains. This suggests that interest rates will continue to rise as the Fed raises rates at the short end and bond traders discount trend growth and higher inflation at the long end.
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If people perceive that all-time high as 'normal,' that's going to make it very difficult to convince them that jobs are plentiful.
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Once that confidence is lost, foreign capital stops flowing here. We'll have much higher interest rates and a negative impact on the economy.
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The recession was largely centered in the manufacturing sector, and that is where we continue to see the strongest signs of recovery.
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There has to be concern about sustainability of growth overseas; Japan is central to that issue, ... If people are looking at fundamentals, that's the only news they have to look at this morning.
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As suggested by the orders data and the ISM survey, the initial stage of inventory replenishment has not been sustained, ... Slower growth ahead remains the most likely outcome.
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You can no longer make the argument that there is a lot of excess capacity out there. The bias on inflation is a little bit to the upside and the Fed has to be careful about that.
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Firms can't afford to offer much, and workers don't want to threaten to leave because of the job situation.
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Firms are substituting capital -- particularly high-tech capital -- for labor. They're putting smart machines on the factory floor and in the service industry. That may explain why high-tech orders for capital goods have been going up, despite the fact that manufacturers don't seem to be hiring a lot of people.