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United States

Report | Economic insight for August 9, 2017

Summary

​A strong labor market with low unemployment continues to buoy the economy, but wage growth remains the impediment to growth. ​

The labor market now likely hovers near full employment rate, but we will not know for sure until if and when wage growth starts to spike. If the labor market continues along its current trajectory, the Fed will begin shrinking its balance sheet by selling assets later this year. But if growth (particularly wage growth) accelerates, then the third rate hike of 2017 should be a go, likely in December, because the Fed wants to be out in front of potential wage and price acceleration.

There may be "shadow factors" that are holding the labor market back including people physically or mentally unable to work, those without higher skills and education levels, and long-held perceptions around work best suited to a particular gender.

Meanwhile, employment and wage growth continue to trend higher for people between the ages of 20 and 34. This bodes well for the apartment market.

Finally, Congress has moved on to tax reform, which could be just as difficult to pass as healthcare reform.

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