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Politics : Idea Of The Day -- Ignore unavailable to you. Want to Upgrade?

To: Les H who wrote (27872)	7/29/1999 10:30:00 AM
From: IQBAL LATIF	Read Replies (2) \| Respond to of 50167

I am looking at this report.. and would highlight the following.. In a slowing economy from a break neck speed a soft landing would result in lower wage price demands. I agree that <<Employment indicators tend to lag more than other economic indicators>> however, we have two set of numbers one is the pressures in the last quarter the seond is slowing economy an ongoing process which is seconded by lower consumer confidence and durable good orders. I was looking at Bloomberg report and have following observations.. Gross domestic product rose at a 2.3 percent annual rate in the quarter, down from the first quarter's growth rate of 4.3 percent. That is one positive. The GDP price deflator, a measure of inflation followed by many investors, grew at a 1.6 percent annual pace in the second quarter, the same as in the first quarter and reflecting a rebound in oil prices from historically low levels. That is second positive, I expected in wake of steep oil price rise that GDP deflator may indicate inflationary pressures too. Spending rate is high and so is labor costs for U.S. businesses that rose faster than expected in the second quarter, a sure red flag. This use to be favourite AG number than went out of favour as AG thought that it masks wage pressures as stock options are not included, this is not going to be the marekt breaker if GDP and consumer confidence keeps lowering. Another positive is residential spending rose at a 5.1 percent rate in the second quarter, down from the first quarter's increase of 15.4 percent, as builders contended with shortages of building materials and workers. Consumer Spending that accounts for two-thirds of U.S. economic activity is slowing and that is anotehr positive, personal consumption expenditures rose at a 4 percent annual rate in the second quarter, down from 6.7 percent during the first quarter. This is also the smallest gain since the final quarter of 1997. Government spending is also slowed, falling 1.2 percent in the second quarter after rising 4.2 percent in the first quarter. These are all positive indicators in the body of the report. Trade deficit of $323 billion wider than the first quarter's $303.6 billion. Wider shortfall has helped subtract from growth too. Another positive sign for corporate profits and global reach of the markets is rising exports, second-quarter exports were $11.1 billion higher than the first quarter, and imports were $30.5 billion more than the previous quarter. Inventories in the second-quarter inventories accumulated at a slower pace than the first quarter, which means they're less likely to be a dragon growth in coming months. Inventories rose $19.4 billion in the second quarter, down from $38.7 billion in the first quarter. Real final sales, which exclude the effects of inventory changes, rose at a 3.2 percent pace in the second quarter, previously reported as an increase of 4.6 percent in the first quarter.