AgentIndustry News

Economy posts ‘firm’ growth

Investment returns give hope to Social Security changes
Published on Dec 28, 2004

There's nobody home at trading desks this week and yields have stayed about the same as the week before Christmas: the 10-year T-note is 4.22 percent, and mortgages are about 5.75 percent for the lowest-fee deals. It is quiet, but there is news: the November economy was firm, consistent with more quarter-point-per-meeting rate hikes from the Fed, and no reason to fear inflation. The best single measure of inflation, the personal consumption expenditure deflator (PCE), shows a 1.5 percent annual core rate, above the 1.2 percent terrain of last year, but nowhere near the 2 percent-plus trouble zone. The financial markets are full of snipers claiming the Fed has cooked the inflation books, and that inflation is really higher, but it's just not so: three-quarters of costs in our economy are labor costs, just now going positive after three falling years, and sky-high commodity prices are not the factor they were during past oil-spikes and weak-dollar intervals. The economy is close to the...

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