Ian Shepherdson Likely Quotations

Katrina and Rita effects still linger, though they are fading, ... Claims will likely rise next week as the full effects of Wilma hit, but the downward trend is very clear.

Things will likely get worse before they get better.

The rise in oil prices was always likely to hit these numbers with a vengeance, and the petroleum deficit duly rose by $1.4 billion.

The revisions are not as big as we feared, ... The new April number shows sales at their lowest level since November, but the previous four months were exceptionally strong, in part due to favorable weather. Given the strong trend in mortgage applications, these data likely do not signal real housing weakness.

With productivity likely to slow a bit further, there is little room for maneuver. In short, good news today but not enough alone to change the outlook.

The Fed's minutes do not change the near-term outlook for policy despite the strong market reaction. Clearly there is some debate as to how much further tightening will be necessary, as the minutes say the number of hikes will likely 'not be large,' but 'large' is undefined. This does not read like a Fed where everyone is looking for a reason to stop.

The Fed will likely ease on Nov. 6, but the Beige Book has not changed the odds, ... And it tells us nothing about the future of the economy or Fed policy.

As far as we can tell, confidence now seems to have run a bit ahead of the improvement in the stock market, and the failure of the Nasdaq and Dow to make further progress in recent weeks makes it doubtful that confidence will continue to rise at the May pace. The sharp rise in unemployment is likely to become a negative factor, too.

The chairman will likely tell the House Budget Committee that conditions are set for recovery.

It's looking more likely ... that we're going to get a sharp contraction.

It seems likely that these numbers will be seen as significantly increasing the chance of an August rate hike.