<<. The 5.3% gain is the largest gain in 17 years.
*
Unit labor costs actually fell 0.1% when they were expected to rise
0.6%.
That is a year over year decrease of 0.4%, the first time it has fallen
since the first quarter of 1984. These are incredible numbers. Again,
the fear of labor driven inflation is not a reality. Speeches today by
the Fed's Moskow where he tried to stir up a smokescreen about
'potential'
wage-led inflation in the face of these numbers simply drain further
credibility from the central bank's already anemic credibility reserve.
We have said it before: the Fed needs to focus on what is happening and
the incredible positive potential we have, not continue to drone on
about
Phillip's Curve models that have not applied to 99% of economic
history.
Let's look at what we have done right the past 20 years, i.e., cut
taxes,
increased incentives, rewarded enterprise and invention, rewarded hard
work, and let free enterprise run. Not coincidentally, in 1983, the
last
time productivity was this high, the Reagan tax cuts and incentives
were
just starting to take hold. How can we enhance this? That is what the
Fed needs to be doing, not trying to put a governor on a machine that
is
working very, very well.>>
* Great excerpt from a bull investor news letter today.. |
