Uncertainty and economic activity have never gone well together. The US is no exception to the rule with less than two weeks to go before the November 5 presidential election. Asked by the 12 regional branches of the Fed during a survey conducted in late September and early October, many American companies and economic actors cited uncertainty as a slowing factor.
The New York Fed reports “ hesitancy in decision-making due to increased uncertainty surrounding the presidential election “. In the Minneapolis area, “some caution about hiring” is mentioned because of this uncertainty, but also because of “some optimism about the increase in labor demand after the election”.
“A period of usual nervousness”
That points out the Dallas Fed, which covers Texas and southern New Mexico “the outlook for the manufacturing industry remained weak, with weak demand and increased election-related uncertainty cited as the biggest challenges”. Same story in the industrial region of Cleveland, to the northeast, where “some manufacturers waited to place orders due to uncertainty surrounding the presidential election”. In the same region, “Two developers have indicated that many companies plan to wait until after the general election to take on building projects.”
A Richmond-area textile manufacturer says it expects “to weak demand as customers buy cautiously into the new year due to the ‘usual jittery period’ leading up to the election”.
“Business travel has slowed in recent weeks in addition to seasonal factors, in part due to heightened election-related uncertainty,” also reports the San Francisco Fed, which covers much of the American West.
The next Fed meeting will take place the day after the election, on November 6 and 7. After cutting rates in September, for the first time since 2020, it is expected to continue, but at a slower pace. A drop of a quarter of a percentage point is expected compared to half a point previously.
(With AFP)