U.S. Outlook: Election nerve flare-ups vs. decent U.S. data
Sweet relief: Next Tuesday is Election Day, and we should receive a little more clarity on the economic and fiscal-policy directions the federal government is likely to pursue for the next four years.
For a look at more developments, see highlights of my report below, followed by a link to the full U.S. Outlook, delivered on Nov. 4.Key observations:
- We finally got some better news as U.S. productivity increased at its fastest rate in two years in the third quarter.
- We have been forecasting a modest rebound in productivity in Q3 and the quarters ahead.
- Chronically low productivity growth in this expansion is likely behind a lot of the political angst we are seeing at the polls this year.
- October’s payroll report (+161K nonfarm jobs) is likely a strong enough gain to keep the Fed on track for a year-end rate hike.