imported post
Just looking I would bet up in the near future...
The markets were up until oil took off. It needs a rest
as oil is over extended ...
[align=left]nderway[/align]
9:02a EDT August 8, 2005
The economy is on the cusp of a significant acceleration, and we will be boosting our GDP and interest rate estimates shortly. The news flow out of the factory sector is improving sharply, with another big rise in the ISM index and a gradual improvement in inventory, orders, and shipments trends. Personal consumption is on track for a blockbuster quarter. Although retail same-store sales for July came in a bit light versus expectations, this disappointment was outweighed by a huge increase in light-weight motor vehicle sales to 20.9 million (annualized), the third-highest level ever. The July employment report was similarly solid. The 207,000 payroll gain was broad-based and came on top of upward revisions. Moreover, the household survey continues to point to very significant employment gains, and wage growth picked up as well.
Searching for a good measure of hiring
9:54a EDT August 5, 2005
We expect the July employment report to show an additional 225,000 nonfarm payroll jobs, an increase of 0.3% in average hourly earnings, and no change in the 5.0% unemployment rate. Our forecast is significantly above the consensus, although we recognize the arguments for a less bullish outlook. The lack of good real-time indicators of hiring creates most of the ambiguity in forecasts at this point in the business cycle. One emerging indicator with promise is the monthly Monster Employment Index of on-line job advertising. Barring a sharp downside surprise, we think this employment report will not be especially meaningful for the economic outlook. Growth clearly is accelerating and will likely result in hiring at or above the average pace so far in 2005, if not in July, then later in the year.
The industrial upturn - it's not just autos
9:25a EDT August 4, 2005
The industrial sector clearly has turned up. Orders have climbed over the past two months, production is up, and the Institute for Supply Management's manufacturing survey has posted hefty increases each of the past two months. But how broad-based is the upturn? Some commentators have suggested that it is mostly a byproduct of strong auto industry performance in recent months - performance which is unlikely to be sustainable as the boost from summer promotions wanes. We are more confident about the prospects for a sustained upturn. The inventory correction has not been confined to the auto sector and capital goods orders are up sharply. Furthermore, the construction of the ISM survey suggests that recent increases are more broad-based.
The bank lending surge: a sign of stronger capital spending?
9:24a EDT August 3, 2005
Commercial and industrial bank loan growth has accelerated to 12.3% year on year, the fastest pace since 1998 and a remarkable turnaround from the contraction seen in the 2001-04 period. While some of the lending acceleration is due to increased M&A activity and somewhat slower profit growth, the lion's share seems to be due to other factors. The most plausible explanation for the acceleration is rising capital spending. In particular, spending by small firms may be stronger than officially measured. These firms rely heavily on bank finance and are underrepresented in the preliminary capital goods shipments data that underlie the most recent official observations on capital spending.
Real GDP report consistent with stronger growth, higher interest rates
8:28a EDT August 2, 2005
Friday's GDP report was important in two respects. First, the inventory cycle was deeper and final demand was stronger than expected. This outcome implies faster growth over the next four quarters. Second, the trade-off between growth and inflation has worsened. The average real annualized GDP growth pace during the expansion was revised downward by 0.3 percentage points. Meanwhile, the core PCE deflator now shows bigger gains over the past year. The report is consistent with a significant slowing in the productivity growth trend. The combination means that it is now more likely that the unemployment rate will continue to decline over the next few quarters. This will put pressure on Fed officials to keep tightening monetary policy. The monetary authorities may find that they need to make monetary policy tight.