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Strategies & Market Trends : The New Economy and its Winners -- Ignore unavailable to you. Want to Upgrade?

To: Bill Harmond who wrote (14607)	10/30/2002 2:08:57 PM
From: stockman_scott	Respond to of 57684

Fed Cut Seems Likely As Confidence Caves, GDP, Jobs Data Loom By Christina Wise Investor's Business Daily Wednesday October 30, 10:49 am ET A Federal Reserve rate cut looked more certain Tuesday as consumer confidence tumbled to its lowest level in nine years and heightened fears the economy has stalled. The Conference Board's consumer confidence index plunged to 79.4 in October. That's down sharply from September's 93.7 and way below the 90.0 economists were expecting. A year ago, the index stood at 85.3. The results echoed findings of the IBD/TIPP Poll earlier this month and the University of Michigan's confidence survey. The data come ahead of the Fed's Nov. 6 policy meeting. "A weak labor market, the threat of military action in Iraq and a prolonged decline in the financial markets have clearly dampened both consumers' confidence and their expectations for the near future," said Lynn Franco, director of the Conference Board's Consumer Research Center. "The outlook for the holiday retail season is now fairly bleak." At the same time, Bush administration officials have begun to acknowledge that the recovery has slowed. "Toward the end of the third quarter, economic indicators began to turn a bit softer," said Mark Warshawsky, deputy assistant Treasury secretary for economic policy. "This was primarily evident in consumer spending." Shaky Consumers And since consumer spending has been about the only bright spot in this tepid recovery, Fed policy-makers may feel compelled to cut rates next week. Other factors include the sputtering factory rebound and the possible impact of war with Iraq. Third-quarter GDP data due out Thursday and the October jobless report due out Friday could cinch a cut, economists say. "It's the news at the end of the week that matters most," said James Glassman, senior U.S. economist with J.P. Morgan Securities. "I'm most intrigued by the jobs report."