<ot> Employment Cost Index up .9% for Q2.
'morning Lee:
Say did you see ECI numbers??? I guess the consensus was for an increase of .8% also I see jobless claim fell 304,000 for the week of Jul.25-Inspite of the inflationary bias I see healthy economy, and hope 'efficiency' increases to match the rise in employment cost. Don't they have a quarterly 'efficiency index'????
cnnfn.com
What they say??
HUGH JOHNSON, CHIEF INVESTMENT OFFICER, FIRST ALBANY
''It's a mild negative for the markets, stocks and bonds, but not a major market mover.
''This is a little bit stronger than expected and, for this number, you have to say that even though it's a little bit stronger, it's troubling. It's troubling because there is so much focus, given Chairman Greenspan's latest comments, on the tightness in the labor markets.''
PIERRE ELLIS, SENIOR ECONOMIST, PRIMARK DECISION ECONOMICS:
''It's not a catastrophe ... but to have it show bad news is something that will help the Fed stay in a biased position'' on interest rates
''This is the kind of number that keeps them concerned and keeps them on the brink of tightening.''
''Its bad news for the Fed and so that means bad news for the fixed-income markets. ... Once you have the prospect of a Fed tightening becoming more possible the stock market doesn't like it either.''
SAM STOVALL, CHIEF INVESTMENT STRATEGIST, STANDARD & POOR'S INDUSTRY REPORTS:
''(ECI) had to be 1.0 percent to really spook people or 0.7 percent or lower to breath a sigh of relief. It could give additional cause for concern but I don't think it will cause investors to rush to the exits.
''Wage inflation is up 3.5 percent (year-on-year) and that is a lot higher than what we see on the Consumer Price Index. Investors aren't going to necessarily say inflation is back but it will be negative for earnings. Companies cannot raise prices to compensate for higher wages, so it will have to come from profit margins.''
The September Standard & Poor's 500 index future was up 7.0 points at 1136.30 at 0845 EDT/1245 GMT, building slightly on its gains ahead of the ECI report.
The 30-year U.S. Treasury gained 7/32 to yield 5.75 percent, reversing a brief dip lower on the |
