November 08, 1999

The recent economic news has been quite bullish for the U. S. The most recent numbers show that U. S. job growth resumed its robust pace in October but wages barely budged. Average hourly wages, a measure used by the street to gauge potential inflation, rose one cent to $13.37 an hour, a smaller than the expected one percent increase. The unemployment rate fell one-tenth of a percent to 4.1%, the lowest figure since January 1972. The data is clearly confounding the Keynesians on the Fed and the street. Strong growth isnt spurring wages or accelerating inflation. To further weaken their argument gold prices have fallen to around $291 from a recent high of $325 and oil has also declined to about $23 per barrel from better than $25. The data seems to validate our position that the recent price hikes were onetime events and that there was no need to panic. We also argued that there was no need for the Fed to raise rates like it did. Hopefully the recent numbers will eliminate most of the reasons for the Fed to raise rates at its next policy meeting.

You must have an active account to view these reports. You may register for a trial here

Download Complete Report in PDF Format

Download Complete Report in Word Format