Productivity Picks Up

Confounding more than one expert, U.S. productivity has accelerated over the past five years. This coincides, not surprisingly, with the pick-up in overall U.S. economic growth. As the U.S. economy has moved past the Great Recession, annual productivity growth has accelerated from 0.3% to 2.8%. However, the latest annual rate is still below the average growth rate of 3.3% in 2000-2005. Why the slowdown? Academics cite globalization, income inequality and high levels of indebtedness, among other factors, as causes. But the trend does not have to be permanent. We note that the U.S. economy was also slow to recover in the first five years after the 1990-1991 recession, and that productivity during...  that period advanced only 1.7%. Moreover, we doubt that factors such as globalization are an overall drag on the U.S. economy. In the past two quarters, productivity has advanced at an average 4.5% rate. Given tax cuts that have encouraged investment, we expect to see stronger productivity numbers going forward.    more

Argus President John Eade discusses the markets response to midterm elections

Market sinks, rebounds

Stocks are mixed at mid-day Wednesday. British Prime Minister Theresa May is facing backlash over Brexit deal with the European Union after cabinet ministers resign. The United States and China continue trade talks, but uncertainty remains high on whether or not the two countries can come to an agreement regarding additional tariffs.  Walmart (WMT) is down 2.7% from the open even though the company beat earnings expectations. ...  more

Trying to Right the Ship: Our Monthly Survey of the Economy, Interest Rates, and Markets

September typically ends summer on a down-beat; it is among the weakest months of the year as measured on the S&P 500 since 1980. And then stocks usually rally in October, kicking off the best quarter of the four for stocks. ...more