<U.S Economy> Don't fiddle with 'perfection' please & the survey says->
Paul-san:
It is getting better every day if you ask me,I think we are gonna be
rrrrrrrriiiiiiiiiich.
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(Excerpted from Bloomberg)
U.S. Economy
Sun, 31 Jan 1999, 12:40pm EST
Federal Reserve Seen Holding Rates Steady: U.S. Economy Preview
Washington, Jan. 29 (Bloomberg) -- The Federal Reserve --
eyeing an economy with low unemployment, low inflation, and
vigorous growth -- will hold interest rates steady at its first
meeting of the year next week, analysts said.
''I don't see why one would fiddle with perfection,'' said
Robert Dederick, an economic consultant at Northern Trust Co. in
Chicago.
Jobs are in abundance and a Labor Department report set for
release Feb. 5 is expected to show that the economy added 128,000
jobs in January -- on top of a December gain of 378,000 -- for a
two-month grand total of a half million.
The unemployment rate, meantime, will likely come in at 4.4
percent, just above December's 28-year low of 4.3 percent, even
as labor costs grow at a non-threatening pace. First-time jobless
claims, set for release Thursday, are expected to remain low,
running at a seasonally adjusted 303,000 for the week ended Jan.
30.
Statistics like that help explain why a survey of the 30
primary dealers in Treasury securities -- the only firms dealing
directly with the Fed's trading desk -- found that all expect the
Federal Open Market Committee to leave policy unchanged when it
meets Tuesday and Wednesday.
''What else would they do?'' said former Federal Reserve
Governor Lyle Gramley, an economic consultant with the Mortgage
Bankers Association of America in Washington.
Manufacturing
Even manufacturing, which has been a sore spot, is showing
signs of a rebound. The purchasing managers' index, a gauge of
factory orders, production and jobs to be released Monday, is
expected to rise to 46.5 from to 45.3 in December, analysts said.
A reading below 50 still suggests manufacturing is contracting,
yet, ''the worst news could be behind us,'' said Rick MacDonald,
an economist at Standard & Poor's MMS in Belmont, California.
For example, the gross domestic product, the nation's total
output of goods and services, increased at a 5.6 percent rate in
the fourth quarter, the strongest showing in more than two years.
That strength was driven in part by a rebound in exports.
Another manufacturing report, to be issued Thursday by the
Commerce Department, is expected to show that factory orders
increased 0.5 percent in December, paced by strong demand for
durable goods. A preliminary report on durable goods already
showed that orders rose a larger-than-expected 1.9 percent in
December, led by industrial hardware and electrical equipment.
Other Reports
In other coming reports:
The Commerce Department is expected to report Monday that
personal income rose 0.5 percent in December after rising 0.5
percent in November. Personal spending, meantime, probably
increased 0.6 percent in December after rising 0.1 percent in
November.
Construction spending, another Commerce Department report
set for release Monday, probably climbed 0.7 percent in December,
helped by housing. In November, construction spending rose 0.9
percent.
Tuesday, the Commerce Department is expected to report that
sales of new single-family homes soared in 1998 -- perhaps to an
all-time annual record -- even as December sales slipped by 2.4
percent to a seasonally adjusted annual rate of 942,000 from
965,000 during November. Rising incomes and low mortgage rates
have fueled home sales and housing construction. Sales of
previously owned homes, for example, set a third consecutive
yearly record in 1998.
Also Tuesday, the Conference Board will release the index of
leading economic indicators, a gauge of growth over the next half
year. It's expected to register a gain of 0.2 percent for
December after rising 0.6 percent in November.
On Friday, the Federal Reserve is expected to report that
consumer borrowing through credit cards, auto loans, and other
personal loans accelerated, increasing by $6.3 billion in
December after rising $3.9 billion during November.
Bloomberg Survey
Date Time Period Indicator BN Survey Prior
2/1 8:30 December Personal Income 0.5% 0.5%
2/1 8:30 December Personal Spending 0.6% 0.1%
2/1 10:00 December Construction Spending 0.7% 0.9%
2/1 10:00 January NAPM 46.5 45.3
2/2 10:00 December New Home Sales 942K 965K
2/2 10:00 December Leading Indicators 0.2% 0.6%
2/4 8:30 1/30 Initial Jobless Claims 303K 301K
2/4 10:00 December Factory Orders 0.5% 0.6%
2/5 8:30 January Avg. Hourly Earnings 0.3% 0.4%
2/5 8:30 January Change Nonfarm Jobs 128K 378K
2/5 8:30 January Unemployment Rate 4.4% 4.3%
2/5 10:00 December Housing Completions 1.600M 1.596M
2/5 3:00 December Consumer Credit $6.3B $3.9B
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