TEXT OF INTERVIEW
Steve Chiotakis: This isn’t one of those numbers you huddle around the radio waiting for. But the Empire State Manufacturing Survey may prove to be quite the predictor when it comes to the unemployment picture moving forward. Bill Stone is chief investment strategist at PNC Wealth Management. He’s with us live from Philadelphia this morning. Good morning, Bill.
Bill STONE: Good morning.
Chiotakis: Why do we care about the Empire State Manufacturing Index? Some obscure index that comes out of nowhere?
Stone: Well, you’re right. I mean as much as we love our friends in New York, I think on the whole it’s good as far as an indicator of overall manufacturing strength in New York, which it was good news there. But I think as far as the employment side of things goes, they actually do track the details underneath there. And it’s worth noting that the employment index underneath that Empire Manufacturing Index is the highest it’s been since October of 2007. And I would just say it adds to what I’ll call the mosaic of data that leads us to believe that we’ll actually see employment increases here in March when we finally see the official data.
Chiotakis: One of the pieces of the puzzle. So the Fed says industrial production edged up too, about one-tenth of a percent in February. The Fed, Bill, kicks off its two-day policy meeting tomorrow. And all signs are pointing to the status quo, but there’s this underlying feeling that the Fed will want to pull back on the emergency measures it put in place during the financial crisis. Any signals we should be looking for?
Stone: Well I think you’re likely to see some sort of language in there talking about the end of the Fed purchases of mortgages-backed securities, that have long been out there, that they plan to end them at the end of March. But there will probably some change in the language as far as more speaking to them in a little bit of the past tense.
Chiotakis: But interest rates stay unchanged and all that, right? We think they’ll be there for awhile.
Stone: Yeah, I think it’s pretty much a given that the rate stays unchanged. And we also think it’s likely that the even the language around the extended period remains unchanged.
Chiotakis: All right. Got to wrap it up there. Bill Stone, thanks.
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