On The Labor Market & Productivity

Yes, the unemployment rate has inched up over the past year. No, that doesn’t reflect a weakening of the economy at large. Permanent layoffs are muted; wages are rising; CEOs plan to hire. No unemployment spike heralding a recession is likely. Fed officials Waller and Williams agree, so we expect interest-rate cutting to be shallow and at a measured pace. … Revised Q2 economic output suggests an impressive rate of productivity growth last quarter, boding well for corporate profit margins and the no-recession scenario.