David Resler
David Resler
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There is a view out there -- and this gets more into psychology than economics, that if Fed moves 50 (basis points) now, it might be all they need to do.
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We're at the stage of the business cycle where statisticians can't keep up with rapidly changing developments, especially new businesses. That's where the greatest potential for an upward revision is.
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We're going to get some extra employment growth as people displaced by the hurricanes find their way back into the job market, and that's likely to continue in the first few months of this year.
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We still have yet to see much evidence that any of this is translating into an inflation threat. Until it does, I don't expect the Fed to move.
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Uncertainty about the pricing environment will keep inventory investment more disappointing than some other economists expect.
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We know that higher gas prices affect consumer sentiment.
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We ended last year with a good bit more momentum on the capital investment front than we thought. We have an optimistic view about this year as a whole.
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Today's numbers are pointing toward a considerable improvement in manufacturing activity in the second half of the year. Inventories are so lean that I can't imagine businesses have enough left to satisfy much of the demand. There's got to be more production.
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Very large swings in seasonal employment during and after the holidays typify the job market at this time of the year.
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While it's true that capacity use rates are very low, it's also true that much of that capacity has been rendered obsolete by technological advances and that replacement of capital is faster than it used to be. So a lot of businesses may feel they have little choice but to spend, if they want to preserve their competitive edge.
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Since the end of January, things seem to have hit a wall across a wide array of economic indicators. This confirms what all that anecdotal evidence and factual reports have been telling us.
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Nevertheless, money supply contractions are often harbingers of bad times ahead, and if this lasts much longer, people will get more concerned.