We remain unabashed US economic growth bulls
This week, we want to highlight three quick macro points.
- Leading indicators of employment are flashing green. Temporary help employment continues to advance at a strong clip, just posting its best month since last November. Consumer attitudes about present economic conditions also continue to strengthen. We find that this metric has a respectable relationship with changes in payroll employment. Consumers tend to spot changes in their own local economies before the Labor Department.
- The trade deficit has room to narrow. The global economy continues to grow above trend, supporting US exports. However, there has been a sharp decline in net imports of crude oil and petroleum products thus far in the fourth quarter. This will translate into a narrowing of the US petroleum deficit, providing a lift to GDP growth.
Productivity is picking up. In Q3, nonfarm productivity rose for the sixth consecutive quarter, rising 1.5% over the last year – a hopeful sign. Moreover, Nowcast estimates for Q4 GDP are currently just over 3.0%. With aggregate hours worked up roughly 1.0% against Q3, there is reason to believe productivity will rise yet again.
RenMac: Analyzing macro factors that impact the investment world.