Productivity Powers Through
It’s a brave new normal of higher wages and interest rates. But things seem to be falling into place in this new dynamic.
Labor productivity has surged to the highest level in decades. The sharp rise suggests a healthy economy in which the benefits of growth can be shared more equitably between workers and businesses, even amid inflation or a softening labor market. That said, some economists are skeptical whether the productivity boost will stick.
Job growth slowed some in October, with 150,000 positions added to the economy — fewer than expected, and fewer than in the prior month. Unemployment inched up to 3.9%, but nevertheless remains historically low.
The softer-than-expected readings may actually be a good thing: The job market is still growing, but perhaps at a more sustainable rate.
It’s another busy earnings week, with major tech and consumer brands reporting results.
On Tuesday, Uber (UBER), eBay (EBAY), Squarespace (SQSP), GoPro (GPRO), Robinhood (HOOD), and CAVA (CAVA) will report. After going public in June, Cava reported a 62% year-over-year increase in revenue in its August earnings report.
Wednesday will be the busiest earnings day of the week, including Disney (DIS), The New York Times (NYT), Roblox (RBLX), Under Armour (UAA), Warner Bros. Discovery (WBD), 23andMe (ME), Lyft (LYFT), and Instacart (CART).
It’s a big week for speeches from Federal Reserve officials, including a speech from Chairman Jerome Powell on Wednesday.
An update on the trade deficit is due Tuesday, followed by a look at consumer credit. On Wednesday, an update on the 30-year fixed-rate mortgage is due. Last week, the average rate declined for the first time in two months to 7.86%.
As usual, we’ll get weekly jobless claims data on Thursday. Rounding out the week, we’ll get an insight into how Americans feel with the University of Michigan consumer sentiment index.
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