Wayne Ayers
Wayne Ayers
below capital continued cost equipment good improve invest past reason technology year
Firms in the past year have continued to invest in equipment and technology to improve productivity. And with good reason -- the cost of capital is below the cost of labor.
convincing early expect half improvement indicate labor market neutral next numbers production risks second suspect
I suspect they will not have a neutral bias; they will indicate risks are on the downside. I think we will, on the production side, see better numbers in the second half of this year, but I don't expect any convincing improvement in the labor market before early next year.
past recessions room
They've got more room to move, and they will move. That's what they've always done in past recessions and what they'll do again.
business creating expect growth half labor market past permanent pickup second sustained until
The second half will show some better growth. Will that be sustained past the second half? For that, two things have to happen: we have to see a pickup in business spending, and the labor market has to stabilize and improve, creating permanent employment. We don't expect to see that until year-end.
bay businesses growth helps hire inflation slower
Productivity growth helps keep inflation at bay and allows real incomes to grow, but it makes businesses even slower to hire than usual.
corporate costs decline economy either labor prices profits rise wage
Productivity always slows as the economy slows. If labor and wage costs are still on the rise and productivity slows, either corporate profits decline or prices increase.
almost biggest declines employment strange sure thinking
I find it strange that we had one of the biggest declines in employment in almost two years and no one noticed, and I'm sure they're thinking the same way over there at the Fed.
business convinced data household labor market others picks quite reflected strong survey turning workers
At labor market turning points, the household survey does better because it picks up self-employed workers and others not reflected in the business survey. But I'm still not convinced the labor market is quite as strong as the household data say it is.
causing changes clear cut helpful labor lower market rates structural true unclear
It's unclear what lower rates would do. If it's really true that productivity and structural changes are causing labor market weakness, it's not clear that another cut in rates would be helpful to the labor market.
election elections moved sidelines sit soon
They'd just as soon sit on the sidelines in an election year, but they will do what they have to do, and they have moved in other election seasons.
decline four last third
This is the third decline in the last four months. Again, it's worrisome, but not surprising.
almost balance bound increase last modest move past pickup production
This liquidation has been so sharp, so severe, not just in this last quarter, but over the past year, that even with a modest pickup in demand, production is almost bound to increase as we move through the balance of this year.
anytime events future plan
They're acknowledging reality. They're saying, 'We'll do what we have to do if future events warrant,' but I still don't think they plan on doing anything anytime soon.
amount appears fairly fiscal means recession stimulus
There's already a lot of stimulus in the pipeline, and there's more to come. So there appears to be an ever-growing amount of fiscal stimulus, which means any recession will be fairly shallow.