Monthly macro bullet points
- We have not made any substantial changes to our outlook in the wake of the Midterm elections. Although recent equity market volatility and the potential for a tighter regulatory environment surrounding the AI buildout present some modest downside risk to the pace of consumer spending and business investment, the results of the elections do not materially change the expectation that overall growth will remain sturdy over the coming quarters. We anticipate full-year GDP growth of 2.4% for 2026 and 2.5% in 2027, essentially unchanged from the October forecast.
- The AI buildout remains intact, but appears set to slow. We continue to track strong rates of high-tech investment heading into the final stretch of the year. Looking ahead, the level of business fixed investment directed toward AI infrastructure should remain robust. That noted, even with strong demand prospects, tightening supply-side constraints (e.g., power, compute) implies a more moderate pace of growth ahead.
- The labor market is poised to remain broadly in balance. Recent firming in the pace of hiring signals that labor demand is now on more secure ground. We continue to foresee a stable pace of employment growth over the next year, anticipating payrolls to expand by an average 65k per month. Though hardly energetic, this pace is in line with our estimate of breakeven job growth and enough to keep the unemployment rate steady at 4.1% over the course of 2027.
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