While recent hurricanes have not had lasting macroeconomic impacts, Katrina may prove to be the exception.
What we're seeing in the report is clear signs that manufacturing has turned. And I think it's turned pretty sharply.
It never really got consumers in the act.
As destructive as past storms have been, they didn't leave an imprint on the U.S. business cycle.
Chairman Greenspan's testimony next Thursday is unlikely to shift his message to signal that a pause is imminent, ... He will probably maintain confidence that the underpinnings of the recovery are sound and that the adjustment in the manufacturing sector will not broaden.
Greenspan's shift to a 'don't criticize what you don't understand mode' signals that the low level of long-term interest rates will, by themselves, not be a factor pushing the Fed towards more tightening.
There's very little chance of a Fed move here, but the debate on the economy is going to keep running.
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