Entries for January 05, 2007

Friday's great payroll and wage numbers–the economy added a better-than-expected 167,000 jobs last month as earnings rose 0.5 percent–marked a real blow to the "hard landing" economic scenario that sees the economy slowing to near-recession levels because of the housing downturn. As long as this economy keeps creating jobs and boosting wages, consumers are likely to continue spending, thus keeping the economy rolling. It's a virtuous circle, so to speak, that makes it unlikely that the Federal Reserve–on ice since last June–will feel the need to cut interest rates anytime soon. As a research note from Action Economics puts it:

Investment firm Goldman Sachs recently sent out a self-congratulatory report marking the fifth anniversary of "our launch of the BRICs concept."