U.S. Outlook: Time for tighter monetary policy?

Posted By Scott Anderson In Economic Outlook | No Comments

Business equipment spending chart [1]This week we saw resilient third quarter GDP. Next week, we expect a strong rebound in U.S. payroll growth for October.

The data will create a quandary at the FOMC meeting, where voting members will need to weigh a tightening labor market and above trend-GDP growth against consumer inflation that continues to run below target.

For more on this, see highlights of my report below, followed by a link to the full U.S. Outlook, delivered on Oct. 27.

Key observations:
  • The hurricanes’ fingerprints on the GDP report were relatively light, despite the plunge in September payrolls – consumer and business spending continued to move higher.
  • By the December FOMC meeting, the economic and financial environment will be more than ripe for another quarter point rate increase from the Fed.
  • We are forecasting a strong rebound in job growth to around 260K from a drop of 33K in September, with the unemployment rate holding steady at a 17-year low of 4.2%.
  • We believe around 80K jobs created in October will be a rebound effect from jobs that were counted as lost during the hurricanes.

Read my full report. [2]

Article printed from Bank of the West: https://changematters.bankofthewest.com

URL to article: https://changematters.bankofthewest.com/2017/10/27/u-s-outlook-time-for-tighter-monetary-policy/

URLs in this post:

[1] Image: http://blog.bankofthewest.com/wp-content/uploads/2017/10/Business_Equipment-Chart.png

[2] Read my full report.: http://blog.bankofthewest.com/wp-content/uploads/2017/10/BankoftheWest_USOutlook_10_27_17.pdf

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