Most economic leading indicators continued an upward trend in November, but at a slower pace, following the previous monthly upward revisions.
Even though rapid growth since the beginning of the year has slowed, economic indicators show a strong likelihood for healthy levels of economic activity in the first half of 2019, while short-term consumer sentiment may suffer due to the federal government shutdown. Read more →
Stock market volatility has increased in recent months. History shows that it is common for the U.S. stock market to be more volatile leading up to an election. Other factors are concerns about current tariffs, expanding potential for a trade war with China, and the FED’s more aggressive approach to tightening interest rates.
The result of the mid-term election was that the Democrats took control of the House of Representatives, leading to a split Congress and likely increased political gridlock. In the past, these circumstances have actually helped to improve stock market performance.Read more →
The year-over-year reading for Core Personal Consumption Expenditure (PCE) rose to 2.0%. This is the Fed’s preferred inflation measure and is right on target.
However, given that U.S. GDP growth rising above a 3.5% annualized rate in the third quarter the expectation is for inflation to rise above the Fed’s target rate.
Rising wages could add upward pressure on inflation, which will give the Fed further support to continue raising interest rates. Average hourly earnings rose 2.8% year-over-year as of September 30. Read more →