Chief Investment Officer,
BNY Mellon CIS
The employment picture continued to brighten in October. Nonfarm payrolls rose by 638,000 during the month, and the unemployment rate fell a welcome one full percentage point to 6.9%. However, it was not all good news as the number of long-term unemployed (longer than 27 weeks) rose by over 1 million and overall employment is still well below prepandemic levels.
While the election voting may be over, it seems that the electioneering may go on for some time. We believe it is unlikely that there will be the substantial changes to current vote tallies needed to upset President-elect Joe Biden; however, the delay in the transition could certainly hamper the new administration’s goal to hit the ground running. The runoff elections for the two Senate seats in Georgia may also hamper congressional planning.
The Federal Reserve (the “Fed”), at its November 5 meeting, voted for no change in federal funds target rates and to continue their purchases of Treasury and agency mortgage-backed securities. In Chairman Jerome Powell’s press conference following the meeting, Mr. Powell continued to strongly urge Congress to take further fiscal steps to help lessen the ongoing economic damage caused by the pandemic.
The news that a large-scale study of a newly developed COVID-19 vaccine showed a 90% effectiveness rate was cheered around the world. As the Fed officials and others have said repeatedly, any meaningful return to pre-pandemic levels of economic activity will depend on people feeling safe while going about their normal business, which will require an effective vaccine. We can all view this as a major step forward toward that goal.
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