Friends, This is a great article from Fidelity regarding the outlook on the business cycle and the impact that will have on the economy. Please let us know if you would like to discuss further. Matt and Andrew The U.S. household sector remains in solid shape; the likelihood of a recession in the U.S. remains low. BY DIRK HOFSCHIRE, CFA, SVP, ASSET ALLOCATION RESEARCH; LISA EMSBO-MATTINGLY, DIRECTOR OF ASSET ALLOCATION RESEARCH; CAITLIN DOURNEY, ANALYST, ASSET ALLOCATION RESEARCH; AND JOSHUA LUND-WILDE, CFA, RESEARCH ANALYST, ASSET ALLOCATION RESEARCH
The U.S. economy remains a mix of mid- and late-cycle phase dynamics, with late-cycle indicators rising in recent months. The household sector accounts for nearly 70% of the U.S. economy,1 and remains a bright spot. Over the past several years, employment conditions have improved substantially, soaking up a significant amount of excess slack in the labor markets. This report will update the outlook, with a focus on the following key questions:
· How much slack remains in the labor markets?
· How quickly will wages accelerate?
· How will wage growth affect the outlook for consumer spending and the transition from the mid- to the late-cycle phase of the business cycle?
· Continue reading here.
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