Joshua Shapiro Quotations

We believe that consumer spending is going to bear the brunt of higher energy prices that we have seen leading up to and immediately following Hurricane Katrina as discretionary spending is curtailed.

People were expecting the worst and I think the reaction you saw is that it wasn't as Draconian as many had feared. There wasn't any real hard table pounding or anything in the minutes that pointed to a 50-basic point hike at the next meeting.

Builders were able to build and so they were out there doing it, and the seasonal adjustment process pumped it up.

Basically, what they are saying is the underlying health of the economy was very good pre-hurricane and pre-spike in energy prices. And it is still pretty good after those things.

I don't think we're talking about a recession or a near recession. I think we're talking about growth that is slower than people expected.

We're in the early stages of a slowdown in the housing market.

With mortgage rates still low, there is no evidence yet that levels of housing activity are declining to any great extent.

I think they are trying to say that they can still do their tightening 25 basis points at a time, but they still have a long way to go in raising rates. Essentially, the message is, 'if you think we're nearly done, think again'.

Refinery shutdowns will have a big impact on gasoline prices, ... and that's a tax on consumers.

Our own belief remains that while core inflation could well inch up in the coming months, it is unlikely to accelerate significantly.

We continue to expect the Fed funds target to reach 5 percent in the second quarter of next year, which is where we see the tightening process ending. Comments from Fed officials suggest that they expect only a temporary hit to growth from higher energy prices, while concern about a drift up in core inflation is increasing.

While we have seen an increase today versus a forecasted decline, housing starts are currently doing on a trend basis what many have forecasted: remaining on a high plateau, unable to move higher but not seeing demand fall off enough to take starts lower.

We would not jump to any conclusions based on these numbers, particularly as the weekly jobless claims figures, adjusted for hurricane effects, point to considerably stronger job growth than reported.

With anticipations of higher rates still clearly in the minds of buyers, we cannot rule out fence-sitters rushing ahead of higher rates.

There are reasonably deep-seated reasons for pessimism on the part of home builders.

Well, with gasoline well over $3.00 a gallon in most places when this survey was conducted, it is little wonder that consumers were cranky,

Export growth will remain solid in the months immediately ahead, which ought to help blunt (but not fully offset) the detrimental effect on the trade deficit of a likely acceleration in import growth.

While this was obviously a good month, we don't expect this to continue. We think it's going to be a slow drift up in core inflation going forward.

While these orders have been volatile of late, the trend remains a solid one. Whether we will see a disruption in this trend due to the surge in energy prices remains to be seen and will ultimately be more important to markets than today's pre-Katrina outcome.

Everyone was so focused on the word 'measured' that they didn't expect them to update the rest of the language to be more aggressive, so that took people by surprise a little bit,

As things get colder and heating bills build up, it's going to come right out of discretionary spending, which will impact less affluent consumers more. For the wealthy, it's an inconvenience rather than a lifestyle change.

February was not a bad month either temperature-wise. If you look at other evidence, things are beginning to roll over. You will see housing starts roll over in the months ahead.

There's not much to worry about as far as imported inflation is concerned. For as long as the dollar hangs in there, we should see a benign reading for import prices excluding fuels.

The trend is not going to be that great if imports are picking up in momentum.

Things are pretty healthy. The economy is growing at a nice clip, exports are rising and inventories are being accumulated.

The strength in manufacturing is increasingly tied to strong demand for exports as well as reasonably good domestic demand. Other economies are doing well and we've still got reasonably good economic growth and inventory rebuilding in the U.S.

Rumblings at the producer level will help keep Federal Reserve officials highly attuned to the inflation situation and will cause them to continue to tilt to the side of tighter policy.

The national labor market numbers are being skewered by the hurricanes at the moment and it's going to be a few months before we get a clean read.

The big question now is how much companies will be able to raise prices for finished products to offset the hit to profits from higher unit labor costs.

A softening trend for consumer spending is the most likely outcome for most of this year, particularly as housing cools off. However, we do not think that consumer spending growth is going to fall apart anytime soon.

This is actually fairly amazing given all the uncertainty engendered by the effect of the hurricanes on September data that has yet to be reported.

They are being as clear as they possibly can be about raising rates in December without knowing what the data will be in the next month,

They are basically saying what every Fed official who has opened his mouth in the last month has said, ... The Fed is going to continue to nudge short-term interest rates, unless something disastrous happens.

It's a wait and see. If we get another powerful storm that does damage to refining capacity in particular, I think all bets can be off if gasoline prices will go higher and stay there.

It's mighty difficult the closer you get to the consumer to raise prices, and that remains the case. There is a big debate out there as to how long can this continue.

It's more of a reason to believe that things are going to slow down.

It's going to be hard in the near term to do anything more than slow the rate of deterioration in the deficit. Imports are just too large compared with exports.

It sounds like he's sort of reaffirming what a lot of the Fed officials have been saying, which is that they are more worried about inflation than slowing growth,

Economic growth in the autumn and winter is likely to be soft, ... and there is going to be heightened pressure on companies to try to pass through some of their higher costs into finished goods prices.

It was a good solid number, maybe not as high as some people were hoping, and not as bad as bonds had feared,

It was 25 basis points, everyone knew that, and so there's virtually no stock market reaction,

It's really suggesting the best of both worlds for the stock market. What's not to like?

The Fed isn't going to get exited about inflation in the labor market. At this stage they are focusing on core inflation at the consumer level and growth. Certainly, the news lately on the growth side has been quite good.

The Fed is not going to raise rates right away, even if the March numbers are really strong. They are going to wait until they get several months of very strong numbers, and for people to start really feeling that the labor market is improving before they raise rates.

The Fed will be keeping a close eye on wage data in the coming months.

The Fed tipped its hat to the fact that growth has slowed a bit, and blamed it on energy prices,

The Fed comments were fairly unsurprising. They indicated that there is more tightening ahead, and that the pace will be determined by upcoming data.

In general, consumers seem to be taking the view, at least initially, that higher energy costs will not disappear anytime soon and that they are likely to take a toll on the economy as a whole and on labor markets in particular.

If you get a big number next week, people will say great, the labor market is finally recovering, this is the last piece in the economic recovery, ... But they'll also say, well maybe now the Federal Reserve will raise interest rates sooner.

In the third quarter, trade will resume its role as a weight on growth, but we are still likely to see a robust G.D.P. picture.

Clearly, as this sales data and also the mortgage application data show, there is plenty of strength still in housing. However, is this, as we speculate above, fence-sitting buying ahead of perceived rate increases, or can this pace be maintained as buyers think that low rates will last for the foreseeable future?

Housing has peaked and we're expecting some moderate weakening in 2006. It's starting to turn into a buyers' market, with fewer buyers chasing more homes at these mortgage rates.

Housing has peaked and we're expecting some moderate weakening in 2006.

I don't see the comments from these two representing a change in the Fed's policy. Everyone knows that rates this low can't last, but the same issues remain -- 'When do you raise rates? What is the right timing'?

Combined with the fact that today's retail sales data point to a surge in July personal consumption, this means that the consumer entered Q3 with substantial momentum.

The information in the report is considered dated because the current focus is on the extent of the damage to the nation's energy and trade infrastructure and therefore on the lasting nature of the effect Hurricane Katrina.

The economy seems to have a decent amount of momentum at the moment.

An aggressive effort by business to pass through higher energy prices will probably largely fail as an increasingly strapped consumer proves resistant.

The January blowout was no doubt mostly a function of record warm weather enticing shoppers out of their homes in much greater numbers than normal for the month.