Most analysts had been expecting the Asian flu to hurt the U.S. economy in first-quarter 1998

By Staff -- Purchasing, 4/23/1998

Most analysts had been expecting the Asian flu to hurt the U.S. economy in first-quarter 1998. Plunging exports were supposed to dampen demand for U.S. goods. Big multinationals were supposed to suffer big earnings losses. What really happened: An exodus to U.S. "quality" investments drove down U.S. mortgage rates leading to record home sales, strong home starts, and a spate of mortgage refinancing. Refinancing activity freed up cash against a backdrop of rising personal incomes, tight labor markets, and falling prices for consumer imports (such as cars and electronics). Still, it seems that a majority of economists believe the Asia-induced slowdown has only been delayed.

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