Steven Wood Spending Quotations

Retail sales have slowed over the last six months in response to the slower pace of job creation, higher rates, and increased volatility in the stock market. Indeed, in the past two years there has been tight relationship between the Nasdaq and retail spending, suggesting further spending weakness in coming months.

Retail spending was much stronger than anticipated. Although some of these gains were due to post-hurricane spending, it appears that consumers are not yet ready to throw in the towel.

Less refinancing activity should dampen consumer spending -- although that has not yet occurred.

Some of the December strength and January weakness appears to be related to Y2K precautions; the (Federal Open Market Committee) will need a lot more evidence of a slowdown in consumer spending than this to convince them that further tightening is not warranted,

Volumes are still strong enough to generate a few new factory jobs amid robust productivity gains. Moreover, capital spending appears to be on track for another solid contribution to third quarter GDP.

This stronger consumer sentiment may yet translate into solid core consumer spending for the holiday season.

We still expect economic activity to slow over the next several quarters as consumer spending slows further and housing declines more because of higher interest rates and energy costs. The absence of inflation will be welcomed at the Federal Reserve.

While these data will be welcome by the (Fed), two key questions remain, ... Will the second quarter spending slow down extend through the rest of the year? Economic fundamentals suggest they will. And will the spending slowdown be sufficient to relieve pressure on labor markets and inflation? At this point, that is still an open question.

While these data will be welcome by the (Fed), two key questions remain. Will the second quarter spending slow down extend through the rest of the year? Economic fundamentals suggest they will. And will the spending slowdown be sufficient to relieve pressure on labor markets and inflation? At this point, that is still an open question.

With employment gains non-existent, income growth has slowed. As households also become more judicious in taking on more debt, consumer spending will remain soft.

Despite the brief moderation in consumer attitudes, consumers appear to be spending heavily still, urged on by widespread hiring and income growth.

Despite the loosening of the labor markets, income gains remain sufficient to support spending at a moderate pace.

Although inventory rebalancing is well underway, weak sales and elevated inventory-to-sales ratios will keep downward pressure on industrial production and manufacturing employment, ... This situation is unlikely to improve until spending accelerates.

Although real consumer spending was strong it has slowed for two consecutive quarters and finished Q1 with very little momentum. In order to sustain recent strength in real consumer spending, job creation will need to accelerate further.

Importantly for the Fed, the pace of real consumer spending slowed in March, and combined with early forecasts for lower vehicle and retail sales for April, suggests there is some scope for slower growth in the second quarter,

Sharp production cuts will continue to bring down inventories, which will set the stage for the economic recovery when spending revives.

Clearly, the best news on inflation is past. These data show that households were spending aggressively last year and that there is a great deal of spending momentum coming into 2000. The Fed needs to tighten now, and they will.

The burden of higher interest rates will weigh down the housing industry further. This, in turn, should lead to moderated residential construction and home related consumer spending on goods such as furniture, appliances, and home improvement items in coming months.

The January gain in construction spending was surprisingly weak given the recent strength in housing starts and unseasonably warm weather.