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To: Hank Stamper who wrote (13967)5/27/2000 4:21:00 PM
From: MrGreenJeans  Respond to of 15132
 
David

I have been thinking: the inflation in wages and other employment compensation will take longer to moderate. Looking back, wages and compensation only recently began to accelerate beyond a sustainable level.

Some random thoughts in no particular order:

The inflation that we have seen has been a whiff of inflation not a severe uptrend. Inflation is a lagging not a leading indicator. Further, if you take the oil price hikes from the CPI you find the CPI has been relatively flat over the past number of months. One more note, wages and compensation and inflationary tendencies due to such have to be correlated to productivity which has been relatively strong these past couple of years which has moderated or supressed inflationary tendencies you would have seen in its abcense because of wages and compensation. (I am beginning to sound like a lawyer.)

we may need the employment numbers showing a strong reversal before Greenie is comfortable again.

You may be correct. I would like to believe in the abcense of inflation and with an economy that may be slowing Greenspan would be more cautious when deciding to hike rates. I would venture to guess that if the employment numbers show a strong reversal we will be talking about a recession on this board.