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To: Lizzie Tudor who wrote (159514)	11/4/2003 5:45:37 PM
From: Oeconomicus	Read Replies (1) \| Respond to of 164684

Challenger Gray and Christmas says not much job growth until 2nd half 04... I think they are wrong. Businesses have been squeezing everything they can out of existing workers for some time - hence the high productivity gains - but on the goods side, business inventories have been dropping sharply. Businesses are going to have to start hiring to replenish their stocks or there'll be shortages of goods. I'd bet the services side has similarly let demand rise ahead of hiring and will also start running short of "inventory" - i.e. available man-hours. BTW, with inventories falling sharply in Q3, the GDP number would tend to lag demand growth. Inventory additions add to GDP as goods are being produced - reductions mean demand is met without production, so are a drag on GDP. This means, IMO, that the pundits predicting a marked slowing of growth in Q4 (to 3%, most are saying) will probably be taken by surprise again. Not 7.2% again, but higher than 3%. JMO.