Stocks should rally if the U.S. and China agree to new negotiations and a ceasefire in the trade war, but the economic impact of tariffs will continue.Market Insiderread more
Democrats want Mueller's testimony on his probe into Russian interference in the 2016 election and Trump's efforts to influence it.Politicsread more
The trade war between Beijing and Washington appears to have depressed Chinese property purchases in the United States. China's own actions may also be playing a role.Real Estateread more
Tesla CEO Elon Musk sent out another email to his employees, pushing them to aim for a record number of vehicle deliveries to end the second quarter of 2019.Technologyread more
More than 300 companies are talking to government officials in Washington about how detrimental the trade war is.Marketsread more
Powell stresses the central bank's independence in a speech that comes amid continuous pressure from the White House to cut interest rates.The Fedread more
The Senate is expected to pass its own version of the border aid legislation, while the Trump administration has threatened to veto both bills.Politicsread more
Stocks in Asia were tepid on Wednesday afternoon after U.S. Federal Reserve Chairman Jerome Powell tempered expectations for a potential interest rate cut.Asia Marketsread more
The purchase confirms Apple's continued interest in self-driving car software, and it will bolster Apple's engineering ranks with additional employees who can build autonomous...Technologyread more
More than 1,000 protesters marched to major foreign consulates on Wednesday calling on leaders at the upcoming G-20 summit to raise the plight of Hong Kong with China and to...World Politicsread more
In a text message, Grisham confirmed to CNBC that she will still be working for the first lady even as she takes on her new roles.Politicsread more
Goldman Sachs economists say the outlook for jobs is even better than they thought, and unemployment could go as low as 3.8 percent next year.
The firm's economists, in a note over the weekend, talked about a labor market "overshoot," with the trend in job growth remaining in the 150,000 to 200,000 range, twice its estimate of what the economy needs to maintain a healthy labor market.
Friday's July employment report showed job growth, at 209,000, well above the consensus 180,000 expected by economists. That follows 231,000 jobs in June, another month in which 200,000-plus growth was unexpected. The unemployment rate fell to 4.3 percent in July, a decline of 0.1 from June.
The economists forecast the strong labor market should put the Federal Reserve on track to raise interest rates once a quarter, even if inflation remains below the Fed's 2 percent target.
Missing in the recovery has been a steady rise in inflation, . The markets have doubted the Fed will be able to raise rates because of the lack of inflation, but Goldman economists disagree.
Looking at such measures as the long-term unemployment rate, job openings and quits, and reports of skill shortages, "the labor market is about as tight as in the full-employment years 2006 and 1989, though not yet as overheated as in 2000. And while the recent hard wage data have mostly disappointed, surveys of wage growth among employers and households signal a wage acceleration to around 3 percent by the end of 2017," they wrote. Wage growth in July was 2.5 percent on an annual basis.
The economists said broader growth measures also look firm, and third-quarter GDP is tracking at about the same as the 2.6 percent reported for the second quarter. However, the rebound in productivity growth is fading. They forecast second quarter was a weak 0.6 percent.
The economy needs to grow at a rate of 1 percent to stabilize the unemployment rate in the short term, a pace below their longer-term potential growth forecast of 1.75 percent, they noted.
"We have made a sizable downward revision to our forecast for the unemployment rate by the end of 2018, 3.8 percent from 4.1 percent previously. Our new forecast is 0.4 pp below the FOMC's median projection as of June and would match the generational trough reached in early 2000," the economists wrote. The last time unemployment dipped below 4 percent was in 2000.
Source: Bureau of Labor Statistics
The economists said it appears that the labor market is likely to "overshoot" full employment, a condition that has resulted in recessions in the past.
Even so, the economists are sticking with their forecast for Fed rate hikes. "Our subjective probability of a hike by the December meeting remains around 60 percent, and our baseline for 2018-2019 is quarterly hikes," they wrote, noting there are risks to their forecast that could sideline the Fed.
"But as the labor market overshoots full employment, the distribution is becoming more symmetric, and in any case we think that market pricing of just one hike per year is much too low," they noted.