Interview: Professor os economics at Princeton University
The Chief economist with the Clinton Administration labor department
>> do you think that today’s economic data, which of course is better than expected, nonfarm productivity or services, restrained labor costs, basically evidence of a healthy economy, but do you believe under this interest rate tightening cycle that we can continue absorbing higher costs?
>> i suspect so. i think part of the reason for increasing interest rates is the fed still believes―is worried about an overheated economy and the risk of inflation.
>> where do you see the risk of inflation at this point?
>> well, i think there is a great deal of uncertainty. there is always uncertainty going forward but particularly now with some of the shots we have with the hurricanes and the oil shocks that we’ve seen, i suspect oil prices will continue to fall back to their historical levels. but one doesn’t know.
>> how much of a threat as you told our producer earlier runaway inflation?
>> well, it’s a risk. and i think it’s a risk that the fed is very worried about ask that’s why it’s very likely it will continue on as a trajectory of raising interest rates. i think it’s less of a risk than was the case in the 1970’s. because i think labor unions are much weaker. labor unions represent less than 10% of the private work force. so i think the risk of a wage price spiral is a lot lower than it was in the 1970’s. but there are costs that could continue to grow and put pressure on inflation.
>> i would like to ask you more about energy. in greenspan’s comments this morning he expressed concern about the vulnerability of natural gas prices. because of uncertain winter demands. yet he also said he was encouraged by recent declines in crude oil since katrina highs. how concerned should we be about energy continuing to be a driving force behind inflation?
>> well, i think it certainly is a risk when you look at how much prices have gone up over the last couple of years. quite dramatic. also we don’t foe what kind of weather we will have this winter which is part of the risk which i think the chairman mentioned. on the other hand the historical pattern has been when oil prices they tend to fall back down again. price increases don’t seem to be persistent. so i would think that the most likely scenario is that oil prices fall back down to the 50’s, to―closer to the historical range rather than continuing to explode but one doesn’t know.
>> quickly previewing tomorrow’s october jobs report, what if we do get evidence of wage pressures?
>> well, i suspect that one report will not matter very much. you have to have a pattern of reports. given the productivity numbers that came out today, pressure from the labor market i think is probably not going to be the main source of inflation. even if we do see strong wage growth. which is not what i would expect. even if we do see it, you’re not going to see panic about inflation.
>> ok. so we should accept a tame jobs report by way of market reaction?
>> that’s what i would guess
点击播报
Listen NYSE --- Deb (fast)
Earnings report --- Ellen (slow)
>> thanks a lot, lori. everyone really kind of talking about merck today. but can you imagine that it was not the biggest gainer of the 24 industry groups in the s&p 500? actually what we did see, semiconductors, the biggest gainers and also energy stocks. gaining for a fifth straight day. in fact, four of the past five days, energy stocks up 7.6%. however, remember, they had a really tough october. down almost 10%. tech hardware also performing well. but to be fair the pharmaceuticals weren’t too far behind. the semiconductors, energy and tech hardware. and merck the biggest gainer in the dow jones industrial average. what we saw with volume, four times the average daily volume. we typically trade about nine million shares in merck today, trading 36 million shares. and you have to remember a lot of that volume coming in the moments right after that verdict did come out. but all today day―but all day today, a lot of interest in merck. oil and natural gas coming off their three-month lows that we saw yesterday. and natural gas was up, crude oil gaining over $2 a barrel. $61.78 a barrel. and even with the increase that we saw in the gasoline and also crude oil, we even saw the transports hitting that record high. we talked about the transports yesterday. hitting the record high. seeing that once again in today’s session. you saw it from the shippers, the railers and also many of the trucking companies. retail, also performing well because you saw many of the october sales from the retailers performing better than expected. some notables, it was jcpenney, nordstrom, also dillard’s and wal-mart. all saying that they had better-than-expected sales, laggards on the day, telecom, media and also real estate. back to you in the studio, lori.
>> we have earnings reports that crossed after the bell. san minutae is one of them. sanmina is one of them. expedia is another. for details we check in with ellen braitman.
>> let’s kick off with sanmina. the contract manufacturer. what sanmina is reporting for its fourth quarter if you exclude items is six cents a share. analysts had been looking for a nickel. those shares are up 6.6% in the extended trade. sales also coming in a little stronger than had been -- $2.77 billion. analysts had been looking for $2.73 billion. as you just saw on the chart, those shares are down 57% so far this year. we also have gemstar out. the company saying that if you exclude items, it was about break even for the quarter. the third quarter that it is reporting. analysts had been looking for a loss of five cents a share. as you see, year to date those shares have also slumped, down 56%. and we’ve got some numbers from starbucks in terms of october net revenue. boosted 21% and the comparable store sales, closely watched, up 7%. so news after the bell from several companies. and with that, sending it back over―let me get―forgot expedia. third quarter earnings, 35 cents a share. analysts had been looking for 31 cents. so four cents better. and those shares are up 8.2% in the extended trade. back over to you.
>> all right, ellen. thanks a lot for that. alan greenspan testified before congress and bonds took another hit. when we come back, we will break down greenspan’s speech and get some clues about the future of the economy. and we will also talk about the nasdaq. it’s risen to a one-month high. “bloomberg’s after the bell” continues.
