Ian Shepherdson Quotations

There are currently more than a million displaced people, and I don't expect many of them to be back at work by the time of the September payroll survey.

We remain relatively optimistic about the housing market, but we do accept that activity fell sharply in the immediate aftermath of Sept. 11,

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,

With unemployment set to breach 6 percent over the next few months, people's view of the current economy is bound to deteriorate, ... But expectations are what matter for spending, and at this level the numbers suggest consumers spending will rise, albeit not rapidly.

With three sub-300,000 numbers in the past four weeks, it is beginning to look as though there has been some real improvement in the labor markets this year.

We have no real idea what the number next week will be, but we can be pretty sure that for the next few weeks the data will tell us next to nothing about the state of the economy across the country outside the areas hit by the storm.

There is a specific reference in February to 'the pace of policy moves at upcoming meetings ... would depend on incoming data', suggesting a degree of potential flexibility that was absent from the December minutes,

We've seen pauses in sales before; (it's) too soon to call this a trend.

There is certainly nothing in this report to suggest any serious slowing, or any slowing at all, in the economy is near.

This reads like they are more scared than they have been willing to admit. And that they are ready to cut rates further - maybe soon.

Looks to us like tax rebate money is being spent, ... Retailers should have a good autumn.

Mr. Greenspan said next to nothing about the current economic situation in his testimony, ... does not sound to us like a signal he has changed his mind on the appropriateness of the current level of interest rates. The rest of the testimony was a clear and unambiguous plea to Congress not to abandon fiscal discipline.

Mr. Greenspan is set to continue the unloosening, the risks of which are 'outweighed' by the benefits, and he'll go faster if he has to,

Mr. Greenspan is at least partly to blame for the turnaround in the fiscal position here -- his musings on the problems of ever-increasing surpluses were a clear green light to Congress to cut taxes.

Mr. Greenspan has all but ruled out a May tightening.

Mr. Greenspan clearly wants to leave the door open to lower rates, but he was more explicit this time in his acknowledgement that there are risks on the other side.

No doubt bears will highlight the rise in continuing claims, up another 29,000, but we are unmoved: A rising ratio of continuing to initial claims signals accelerating productivity growth, not a shaky recovery, ... Labor market conditions are improving -- but we still expect a soft payroll report Friday.

One steep drop in housing starts does not make a downward trend, especially in a month which was very wet in the West and very cold in the Northeast. Still, the data are consistent with other signs of a softening housing market, most notably the drop in homebuilders' confidence. What really matters, though, is whether sales will fall fast enough to turn a softening into a collapse.

Only a few years ago, auto sales numbers like those seen recently would have automatically lead to expectations of higher prices, ... Now, increasing transparency in car prices, substantially due to the Internet, together with the automakers' ability to hold down unit labor costs, means that stronger sales do not necessarily lead to higher prices.

Only a few years ago, auto sales numbers, like those seen recently, would have automatically lead to expectations of higher prices, ... Now, increasing transparency in car prices, substantially due to the Internet, together with the automakers' ability to hold down unit labor costs, means that stronger sales do not necessarily lead to higher prices.

My guess is that is that at the moment these numbers seem to be supporting the slow down story, ... But the market is pretty much ignoring it and moving on.

My guess is it won't be very exciting because he already told us three weeks ago what he thinks. He's certainly not going to say anything that suggests the Fed might be thinking about not cutting rates as soon as the market thinks but I don't think he'll want to give the impression that they're going to slash rates even more aggressively.

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

Next month, payrolls will plunge. Our guess is negative 500,000.

No doubt these numbers will be taken by the market as a clear sign of a softening housing market and, by implication, an indication that higher interest rates are biting. We are much more skeptical: housing starts lag home sales, which have been depressed in recent months more by lack of inventory than by higher interest rates.

On the face of it these are very Fed-friendly numbers.

If we had any faith in the reliability of these numbers, we'd have to call them disappointing, ... But we don't, so we won't.

If these declines were part of the normal economic cycle we would now call for a recession in the U.S., but they aren't. The index is responding to a shock, and we expect it quickly to rebound.

If this continues, it can do real damage to core inflation, making it all the more important that the Fed succeeds in slowing the economy to ease inflation pressure.

If this is sustained we can be more hopeful the trade deficit will not rise further,

Bear in mind this survey is always more volatile than the ISM, and there may be an outsized July 4 long weekend effect, too. But these are bad numbers.

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.

Given the complete absence of meaningful inflationary pressure evident in the economy now, and -- as the Fed put it, 'tentative evidence of a slowing in certain interest-rate sensitive sectors of the economy' -- we think there is very little chance that rates will rise again in the current cycle.

For the second straight week, jobless claims have substantially undershot the consensus, ... Analysts apparently do not want to accept that the flow of extra job losses caused by the events of Sept. 11 is slowing sharply, but that is exactly what the data indicate.

Ignore the ISM at your peril, ... Assuming this report is not a fluke - everything we look at suggests it is very real - it is consistent with year-over-year GDP growth accelerating to 4 percent by the summer.

There is no clear steer on policy in this speech; analysts with different views will read it in different ways.  But we think the Fed chairman knows recovery is here; he just wants to be a bit cautious -- and in both directions, which means no more easing,

There is no chance of a spontaneous slowing in home sales. The market will soften if -- and only if -- mortgage rates rise significantly.

We think confidence will rebound next month, but in the meantime the odds surely now favor a Fed ease next week,

He used the word 'pre-emptive,' which was the signal he used before the March 1997 rate hike.

Katrina and Rita effects still linger, though they are fading, ... Claims will likely rise next week as the full effects of Wilma hit, but the downward trend is very clear.

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.

It is hard to make the case that the inflation threat from import prices is serious. The trend is clearly not as good as in the recent past, but it is not bad enough to cause any problems on its own.

It is impossible to tell how much of the drop simply reflects the inability of the seasonal adjustment to cope with the end of the auto retooling shutdowns, and how much is due to the underlying trend,

It is beginning to look as though there has been a real improvement in the labor market at the start of this year.

Our guess now is that there will be some incremental decay of consumers' expectations, especially in the New York area, but it will not be sufficient to upset our basic recovery story,

Over the next few months we expect starts to strengthen as reconstruction begins on the Gulf Coast - the rise in permits may be an early sign - but elsewhere starts still need to lag sales. Demand is still huge but there are too many new homes for sale.

Our forecast was undone by two factors. The impact of the post-Katrina spike in oil prices is lingering; it will eventually fade. Second, trade in goods ex-oil and aircraft -- core -- deteriorated again.

Overall, this is not too bad a report, but clearly there's some pressure in some sectors.

Overall, this is a very robust report. There was a big upward revision to November orders excluding transportation, to a gain of 0.6% from down 0.6%.

Overall, the survey is still very strong, but we hoped for a bit better. A further decline next month would be a bit disconcerting, but there is no reason to expect that.

Overall, the recent sales data appear to point to a renewed upturn in spending.

Overall, the labor market is improving, but progress is still slow,

Overall, still quite strong, but a bit disconcerting nonetheless.

Overall, solid domestic final demand, but the second quarter will be much weaker. We expect growth to slow to 3% or less, led by a sharp slowing in consumption.

Our view is that home sales will slide through the summer, dragging housing starts down into the fall. But this is still no more than a forecast; mortgage applications are still very strong.

Output will not immediately accelerate to the pace suggested by the orders numbers ... because companies are still aggressively running down inventory.

Our measure of core sales, which excludes autos, gas and food, rose a pitiful 0.1 percent, the worst performance since April and impossible to square with Mr. Greenspan's assertion last week that the economy is regaining traction,

People have plenty of cash - and the inclination to spend it,

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.

Looking forward, we can be unequivocal: New home sales have to fall, because the level of demand for new mortgages for house purchase recently has not been sufficient to sustain current sales rates.

Looking forward, downside risks remain, and there is clearly no bar on further easing,

Just about everyone who buys a house uses a mortgage, so a sustained drop in mortgage demand tells you where home sales are going, regardless of the current sales data.

July sales always looked unsustainably high relative to the level of mortgage applications so a correction was due. This drop in sales does not mark the start of a sustained weakening.

It is disappointing in the wake of the huge rise in the Empire State survey -- the indexes are usually at similar levels,

Manufacturers are still miserable, and output will keep falling for some time, but they can now see light at the end of the tunnel, ... They are working off their excess inventory ... and are now hopeful of stronger orders by the year-end.

Most notable was the leap in the prices-paid index, ... this is simply a reflection of higher oil prices but it may not have been fully anticipated in the markets.

We doubt this can be sustained as the reality of $2.60- plus sinks in. For now, though, it looks good.

We doubt that this report unambiguously points to slower growth ahead --but it does mean no rate hike on (Aug.) 22,

We doubt that this report unambiguously points to slower growth ahead -- but it does mean no rate hike on the 22nd.

While claims at 350,000 or so would not be a disaster, they would be consistent with (monthly) payrolls trending at only about 125,000 -- not enough to push the unemployment rate any lower.

We expect a couple of very rough months for consumers spending.

We expect a big drop in September: Katrina has depressed sentiment and pushed up jobless claims.

We had hoped the flow of people filing for extended benefits would slow this week, pushing claims back towards their underlying trend -- about 350,000, but it didn't happen,

With the fastest productivity growth and biggest drop in unit labor costs in seven years, the numbers are certainly worth shouting about, but as yet we are far from convinced that much of the improvement is structural. Mr. Greenspan is of the same view, which is why rates are going up no matter what happens to productivity growth.

The pattern in claims in recent months is strikingly similar to 1990 -- a long slow climb and then a sudden acceleration as layoffs accelerated,

We are not forecasting a recession, but there is some truth to the notion that negative news can be a self-fulfilling prophesy. If companies expect demand to slacken, they scale back production. And if consumers expect doom and gloom, they scale back spending. That's just the way it works.

The only soft spots in the survey remain inventories and employment, but they will recover.

There is, in short, no sign that the housing market has turned down. The lack of supply of existing homes simply means that prices will rise more quickly -- and with mortgage rates at just over 8 percent, there won't be any slowdown in home sales anytime soon.

There is, in short, no sign that the housing market has turned down, ... The lack of supply of existing homes simply means that prices will rise more quickly -- and with mortgage rates at just over 8 percent, there won't be any slowdown in home sales anytime soon.

There is at least some light at the end of the tunnel, but unfortunately it is still a long way off,

This strongly suggests that core finished goods' prices will slow over the next few months,

We believed the underlying level of claims peaked in the spring. This suggests that they may now genuinely have begun to decline.

The data suggest real consumers' spending rose marginally last month -- but we still expect only a 1.5 percent annualized increase in the fourth quarter,

The data confirm that the labor market is still not generating the sort of cost pressures many analysts expected with 4 percent unemployment.

This report will leave the markets still pushing for a Fed ease...but perhaps with a bit less conviction, ... It is still not a done deal.

This report is stronger than it looks and is consistent with the industrial recovery gathering pace,

This report is much stronger than it first appears.

This report indicates manufacturing is continuing to rebound from the Asian crisis, which is exactly what the Fed expects.

This report does not change the big picture, but it lifts the starting point for growth in both the first quarter and 2003 as a whole; good news,

This report augurs very well for the holidays.

The rebound in expectations since October is still big enough to signal strong first-quarter consumption, but not a sustained boom.

There is a clear change in the tone of the Beige Book, but not all the news is good.

We think the trend in layoff is downwards, ... but we're not yet ready to argue that all the danger has passed.

We think the relief is temporary; no other data supports the slowdown story,

We think there is a good chance that home sales recover, or at worst stabilize, over the next few months. The starts data are potentially seriously misleading.

With productivity likely to slow a bit further, there is little room for maneuver. In short, good news today but not enough alone to change the outlook.

The question the Fed now faces is what will happen to growth looking forward in the wake of a 75-basis-point tightening?

This will doubtless shock the markets, and makes an October rate cut more likely, but it does not change the outlook for a near-term recovery, ... Falling employment, rising unemployment lag activity. These numbers reflect the second quarter economic stall.

There is no reason yet to expect a real weakening in sales.

The price index was up, ... This reflects the rise in oil prices and not much else, but that won't stop doom-mongers worrying about it. In short, the report shows manufacturing is still on track.