Second quarter GDP growth was 3.8% and the Atlanta Fed’s latest estimate of the third quarter growth is 4%. (However, current estimates for fourth quarter growth are for a slowing to 1-1.5%). One question I’ve been fielding frequently concerns the apparent paradox between the robust GDP growth in recent quarters and the persistent weakness in labor markets. Here’s my analysis of this economic puzzle.
And that could create problem for FED, with conflicting good growth but weaker labor markets, could prevent them from lowering rates unless inflation resumed falling rather than picking up or even just remaining at about 3%. And rates higher for longer could create problem for equity valuations.
And that could create problem for FED, with conflicting good growth but weaker labor markets, could prevent them from lowering rates unless inflation resumed falling rather than picking up or even just remaining at about 3%. And rates higher for longer could create problem for equity valuations.