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To: MythMan who wrote (8781)	10/16/1998 9:45:00 AM
From: Joseph G.	Respond to of 86076

<<NEW YORK, Oct 16 (Reuters) - Following are comments from U.S. economists after the Federal Reserve reported U.S. industrial production fell 0.3 percent in September after a revised 1.6-percent August gain. Capacity utilization fell to 81.1 percent from a revised 81.6 percent August reading. Economists polled by Reuters had forecast, on average, a 0.1-percent production increase and an 81.5-percent capacity utilization level. SCOTT GRAHAM, CO-HEAD GOVERNMENT BOND TRADER, PRUDENTIAL SECURITIES: "Clearly the market is probably relieved to see those numbers after Greenspan decided to ease yesterday. Those are probably numbers that he already had in hand when they made the decision. I also think it points to the fact that he has already stated that the manufacturing sector is struggling through here. Graham was interviewed on Reuters Television. KIM RUPERT, SENIOR ECONOMIST AT STANDARD & POOR'S MMS: ''(It's) kind of what we've already known. A lot of this data was already set up in employment report to a large extent. We knew that some of the auto (figures) should be fairly weak and it was. No real surprises, it's weak as expected.'' CLAUDE PERSICO, ECONOMIST, DRESDNER KLEINWORK BENSON, N.A.: "It's definitely weaker than expected but it seems like it's all in the auto and steel sectors. We're seeing some after-effects of the GM strike. ''It's a good backup (in manufacturing) for the Fed. We know they are lowering interest rates for the credit crunch and the global crisis but the background for the cuts is the economy is slowing.'' RICHARD BERNER, CHIEF ECONOMIST, MELLON BANK CORP.: ''This clearly reflects weakness in manufacturing, including notably in the business equipment area, that is likely to continue. I think we're really starting to see for the first time some fall off in capital goods output that reflects the squeeze in profit margins and the growing concern of businesses about that squeeze and about that dwindling cash flow. We've got the second decline in manufacturing in a row and that suggests further weakness is likely given the fundamentals affecting manufacturing.'' ELIAS BIKHAZI, SENIOR ECONOMIST, I.D.E.A.: "Definitely weaker than forecast and just outright weak. The declines are pretty much the same across the board except for utilities, but you can basically discard that. "People were wondering about the Fed's move yesterday ... but this (report) is certainly the Fed's own baby -- they're the people who compile this thing. ''By now you should be over the GM distortions, so it's weak and it's not distorted. I think you're in store for more weakness. The question is how fast you decelerate.'' PETER KRETZMER, SENIOR ECONOMIST, NATIONSBANC MONTGOMERY SECURITIES: ''The broad categories were all off significantly. It ends the weakest quarter for industrial production in quite some time, essentially flat, and starts us off on the fourth quarter on a contracting manufacturing foot as well.''>>