Ed Yardeni finds the labor market ‘funky'

Economic Outlook - The economy is experiencing good final demand and GDP growth, with real GDP running around 2.5% this year, influenced by tariff-related weaknesses in the first quarter and shutdown impacts in the fourth quarter, while the second and third quarters showed strong performance [3] - The forecast for next year predicts real GDP growth of 3% to 3.5%, with labor force growth between 0.5% and 1%, and productivity expected to be at least 2% [4] Labor Market Dynamics - The labor market is described as "funky," with various factors affecting it, but strong productivity growth is beneficial for consumers as it leads to rising wages outpacing prices [2] - There are challenges in the labor market, including restricted immigration and a mismatch between the skills of recent graduates and the needs of businesses, which may hinder hiring [6][8] Productivity and Technology - Companies are increasingly looking at artificial intelligence to enhance the productivity of their current workforce, which is expected to continue improving [6][7] - The overall productivity growth is anticipated to remain strong, contributing positively to the economy [7]