Bill Cheney
Bill Cheney
actions bona chances confidence cut demand directly downward edge growth impact increased indirectly job lay losses negative newly odds perhaps quarter recession spending spiral tend
With today's report, the odds of a negative quarter of GDP growth have increased substantially, and the chances of a full-fledged recession just went up -- perhaps approaching 50-50. Job losses cut directly into the spending of the newly unemployed, and indirectly tend to have a very real impact on the confidence of those who are still working. If demand falls, firms will lay off more employees, and the downward spiral could put us over the edge into a bona fide recession before the Fed's actions can take effect.
fact future looks people prices
The fact that prices have come down makes people feel better and they think the future looks better.
coming fairly fed percent starts sticks
If unemployment sticks at about 6.0 percent and starts coming down, the Fed will probably feel it has to start tightening fairly soon.
chairman fed greenspan money period pumping start third toward weakness
I think we're toward the end of a period of real weakness and, by the third quarter, all the money (Fed Chairman Alan) Greenspan and the Fed have been pumping out will start to be spent.
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The unemployment situation won't truly improve until businesses increase hiring a lot more than they did in February. It takes roughly 150,000 new jobs per month just to keep the unemployment rate steady, as population growth increases the work force.
boost cuts defense growth net next percent produce rise risks spending stimulus tax
If even 5 to 6 percent GDP growth isn't enough to get any net hiring, then the risks rise that the stimulus from the tax cuts and defense spending could produce a one-time boost that will fizzle out next year.
chance definitely hike jobs june looks percent rate report strong
I'd say there's only a 25 percent chance of a rate hike in June even. Even with another strong jobs report Friday, they'll want to have something that looks more definitely like a trend.
buying christmas close coming consumer gauge industry number onto patterns perhaps represents retail sales season sentiment shopping since year
The retail sales number is perhaps more important than it would look at first sight. Since we're coming so close to the Christmas shopping season when most of the retail sales of the year happen, anything that represents a gauge of consumer sentiment and consumer buying patterns is going to be latched onto by the retail industry as an important indicator.
accounts alarming clearly data dragging percent related since total
Most of the really alarming data has related to the manufacturing sector, which clearly is slumping. But since it only accounts for about 15 percent of total employment, it isn't dragging everything else down.
developing inflation jobs market overall percent positive rise wages
I don't think it really suggests there is any inflation developing -- a 0.3 percent rise in wages is pretty manageable. But it's a pretty positive report; it suggests that the overall jobs market is pretty healthy.
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Monetary policy is the perfect instrument for these circumstances. The Fed can keep pushing as needed, but still can turn on a dime and pull back as soon as spending starts to rebound.
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Santa's workshop will be operating pretty much at full capacity. There just probably won't be much elf overtime.
inflation potential reality
Inflation is a potential risk. It's not a reality yet.
series
It's another in the long series of the no-news-is-good-news story about inflation.