Ian Shepherdson Consumer Quotations

We remain of the view that the Fed's near-term objective is simply to support the stock market until consumer and business sentiment improves,

Now the question is whether sales can hold up in the face of lower consumer confidence,

Given the huge decline in consumer confidence, this (gain in spending) does not seem unreasonably weak, especially with consumers' real after-tax income growth slowing too.

It is just too soon to be sure that the second-quarter slowdown will be sustained, ... The level of consumer confidence is still consistent with 5 percent spending growth.

Looking forward, we think there is next to no chance these numbers mark the start of a real slowing in consumer spending. The markets will no doubt take comfort from the headlines, but it is temporary relief.

We fully expect sentiment to drop sharply, putting in place the conditions for much softer consumer spending numbers.

People told consumer surveys they were miserable, but they were willing to borrow money to pursue a bargain,

The Fed's chief worry is still the labor market. So long as the unemployment rate does not fall further, and clear signs of consumer slowed own emerge, the Fed will be able to leave rates on hold.

The Fed's chief worry is still the labor market, ... So long as the unemployment rate does not fall further, and clear signs of consumer slowed own emerge, the Fed will be able to leave rates on hold.

If real spending rises at this pace in February and March, consumer spending will rise just 2.3 percent for the quarter, the softest since Q2 1997,

Clearly, these headlines will assuage some of the fears of a consumer collapse, and they mean the Fed will wait till the meeting before easing again. We still look for at least a 25-basis-point easing on Jan. 31.

The January revision is mostly due to the plunge in aircraft orders reported in the durable-goods numbers. In February, the index was pulled down by lower consumer confidence, higher jobless claims, shorter delivery times and lower building permits.