Sherry Cooper Growth Quotations

Today's US employment report, though not a blockbuster, certainly portends at least a 3% growth rate in the second quarter.

While much of the growth surge reflects stellar productivity gains, this pace of growth is way too strong for the Fed,

While overall U.S. growth slowed, it by no means is flirting with a stall; soft landing chances were increased by this news, ... Indeed, some may ask, 'what landing?'

There is no longer a shadow of doubt that the U.S. economy is downshifting rapidly; the only question is how deep the slowdown goes, ... We do not expect to see recession in 2001, but we certainly expect to see significantly slower growth with continued moderating inflation.

After a spring lull, consumers are back on track. While we do expect some cooling in the fourth quarter due to the pinch from higher energy prices, spending growth remains remarkably resilient.

Financial markets want the Fed to signal possible easing ahead due to the growth slowdown and stock market declines, ... However, the Fed will be reluctant to do that while CPI core is still accelerating.

Despite slowing job growth momentum, the Fed is going to pay attention to the diminishing slack (the 5 per cent unemployment rate could be as low as 4.8 per cent if not for the hurricanes) and the pickup in wage pressures,

The modest downtrend in order growth is pointing to some moderation in the months ahead,

The Christmas season this year might well bring cheer, but consumption growth next year is bound to slow, ... From an annual pace of nearly 4.0 percent in 2004, consumer spending will likely grow at a 3.5 percent rate this year, decelerating to a 2.25 percent pace in 2006.

The Fed might have been in a dilemma if signs of slower growth were coupled with signs of a wage/price spiral. However, that is emphatically not the case. The underlying inflation outlook is not a problem for the Fed or the financial markets.

Investors appear to view the growing shortfall as a natural by-product of robust U.S. growth and not a sign of flagging competitiveness, ... The concern for financial markets is that if this view ever changes, the fallout would occur rapidly.

These two key reports reinforce the underlying story of red-hot growth and stable inflation, which was the hallmark of the U.S. economy in 1999,

However, there are deepening questions as to how far they will go beyond that point, especially given the looming hit to growth from the spike in oil and gas prices and the renewed Canadian dollar rise.