Ethan Harris
Ethan Harris
across auto collapse component growth incentives knew major months number rest row sales single stop weak
We knew we would have a very weak number because of a collapse in auto sales after two big months in a row and the incentives kind of stop working ... But if you look at the rest of the report, every single major component was up. It was very broad-based growth across many components.
against central err feeling restraint side
Our feeling is that because you have a new central banker, they are going to want to err on the side of restraint against inflation.
benefits consumers economic job labor market reasons recovery spend sustain
Ultimately, for the economic recovery to sustain itself, we have to see the labor market improve. As the tax-cut benefits fade, consumers will look for more fundamental reasons to spend money, and there will have to be some job growth.
best confidence corporate economy evidence gaining looking news side
What we're looking for is evidence of the corporate side of the economy gaining confidence and making real commitments in its own spending. There, I'd say the news is at best mixed,
according almost appetite deficit dollar dramatic drop growth improve incredible major movements reason sustained trade weak
Only with very weak U.S. growth or a major drop in the U.S. dollar will the trade deficit improve on a sustained basis. The reason you need these dramatic movements is that the U.S. has, according to almost every study, an incredible appetite for imports.
case economy functions good help quite
If we have an economy that functions O.K., with a little help from the Fed, in that case gridlock is quite good for the market,
closing gradual industries job losses process seems since
More and more of the job losses are in industries that are effectively closing down domestically. This has been a gradual process since the 1950s, but it seems to have accelerated.
entering uncertain
Now you are entering a much more uncertain period.
capacity concerned economic excess fed growth needed percent quarter rid third
We needed 20 percent economic growth in the third quarter to get rid of all of the excess capacity in the economy. The Fed is still going to be concerned about disinflation.
economy knew obviously revise weak
Obviously we have a pretty weak economy and this was not unexpected. We knew they were going to have to revise it downward.
federal government limited natural role takes
Usually the federal government takes a much more limited role in natural disasters.
economy keeps major recession war
We're not going to be in a recession if the economy reverses quickly. But if the war keeps going on, recession is a major risk.
cases companies cutting growth hours looking numbers obviously payroll people reflect slower workers workforce
We are obviously experiencing slower growth and the payroll numbers don't really reflect that yet, which is why they will be an important indicator. Companies have been cutting back the number of hours their workers put in and in some cases cutting back their workforce altogether, and that is what people will be looking for in the numbers.
assuming bond fed gets hikes market pulled
What we're assuming is that as the Fed hikes rates, the bond market gets pulled along.