After yesterday’s piece on how many economic indicators are starting to move back to normal, it was nice to have the Fed ratify my point. The Fed has been buying $80 billion per month of Treasury securities and $40 billion per month of mortgage-backed securities. Yesterday, the Fed announced that, effective immediately, it would be cutting $10 billion per month from its Treasury purchases and $5 billion from the mortgage purchases for at least the next two months. Plus, it has the expectation that the drawdown will continue into next year—and possibly accelerate. This is a necessary first step in taking monetary policy back to normal.

As we deal with the daily rush of news and data—the elections, the Fed meeting, earnings, and so forth—it is easy to lose sight of the bigger picture. Yes, there is a lot going on. Some of it is good, some of it is bad, and most of it is somewhere in the middle. But if we step back a bit, we can see that, on the whole, we are returning as a country to something like normal, at least on an economic basis.

After a difficult September, the markets saw a bounce in October. Both the Nasdaq and the S&P gained more than 7 percent, and the Dow was up almost 6 percent. These results were driven by the stabilization of key economic data. Job growth declined in September, but a higher October result is expected as labor demand remains strong. Plus, consumer confidence has stabilized.

Last week, a number of important economic data releases gave us updates on consumer confidence, business spending, personal income and spending, and the third-quarter GDP report. The first look at third-quarter GDP growth showed that the pace of the economic recovery slowed during the quarter, largely driven by a slowdown in personal consumption growth. This will be another busy week for updates, with a focus on business confidence, the results from the Fed’s November meeting, and the October employment report.

I am still in Atlanta this morning, after a terrific watch party with about two dozen of our advisors, sponsors, and guests. It was great to see everyone and especially to meet some new people. That said, today is another travel day, headed back from Atlanta to Boston. So, let’s take some quick hits on news items that intrigued me.

Thinking about the constraints I mentioned yesterday, I want to dig a bit deeper into the employment and jobs question. As I wrote last week, I expect the jobs market to stay tight. There are now more jobs out there than there are workers. Unless something drastic changes, that is likely to remain the case. As job growth continues to outpace workforce growth, that situation is likely to force changes, including increased automation.

It’s another day of travel for me, as I head to Atlanta to host a National Conference watch party for Commonwealth. Gathering together in Las Vegas, as we had originally planned for our National Conference, was simply too risky. Between full hospitals, the inability to host outdoor events, and the fact that there would be thousands of non-Commonwealth guests in our hotel, it simply didn’t make sense to have everyone take those risks.

I have been writing this blog for going on 10 years now and have been in this business for longer than that, so I have been asked a lot of questions. They tend to come in cycles. At this point, unless something like the pandemic comes along, which really is new, they also tend to be variations on a theme.

Last week saw the release of several important economic updates, with a focus on the housing sector. September’s existing home sales report was a highlight, with sales growth hitting a one-year high during the month. This will be another busy week for updates. The reports scheduled will touch on wide swaths of the economy, including a first look at third-quarter GDP growth.

Brad here. Over the past couple of weeks, I have been mentioning that I thought there’s a risk of a “heating” wave of the pandemic this fall in the northern states, following the “air conditioning” wave we saw in the southern states this past summer. I discussed it as a reasonable risk and something to keep an eye on, but my colleague and friend Pete Essele has gone well beyond that and done the work here to establish in detail both what happened over the summer and what that could mean for the fall and winter. Definitely worth a read! Great job Pete and thank you.