SBF guilty — A jury convicted Sam Bankman-Fried of all seven criminal charges he faced for stealing billions of dollars from customers at his crypto exchange FTX. What’s next — The speedy verdict closed a chapter of one crypto mogul’s epic fall from grace, but a host of legal and political woes are dogging other major players in the industry. Our Declan Harty reports that cases involving Binance, Coinbase and Gemini could have huge ramifications for the market. Jobs day preview — It’s one of those moments when a “meh” economic reading is what the Federal Reserve and Wall Street really want to see. This morning’s release of October employment data is a big test of whether the Fed made the right call this week. The FOMC on Wednesday decided to extend the pause in its rate-hike campaign to see whether rising borrowing costs are doing the job of taming inflation. But even if the data shows a surprise surge in employment, the Fed just got another big reason to think twice about hiking. Let’s get into it: What economists expect today Economists are forecasting that nonfarm payrolls rose by 180,000 jobs in October, down from the September surprise of 336,000. It would amount to a solid, if less-than-spectacular, month of growth. A jobs report that shows signs of cooling – in line with expectations — would nudge the Fed to hold steady. What if they’re wrong? A surprise to the upside, on the heels of a blowout GDP number for the third quarter, could push the Fed to tighten further — a possibility that Chair Jerome Powell left on the table this week even as he sounded slightly more doveish. But everything may be OK. That’s because the Fed got a great piece of news Thursday that shows the labor market may still be trending in its favor. Nonfarm productivity — a measure of worker output per hour — rose by 4.7 percent in the third quarter, its highest rate in three years, after increasing by 3.6 percent in the second quarter. Unit labor costs, a measure of how much a business pays its workers, fell. Why does productivity matter? The productivity trend is encouraging because it signals that inflationary pressures are receding even as the economy continues to show resilience, EY-Parthenon senior economist Lydia Boussour wrote Thursday. Companies will be less inclined to pass their elevated costs onto consumers by raising prices. Anecdotal evidence from executives, according to Boussour, indicates that businesses are investing in technologies such as generative AI and finding other ways to boost labor efficiency by focusing on retention and long-term training. “The continued slowdown in unit labor costs is a piece of good news for the Fed, pointing to an environment where labor cost pressures are easing,” she said. As Chicago Fed President Austan Goolsbee told our Victoria Guida earlier this year, the productivity growth rate in the eyes of the Fed is “the absolutely most critical piece of information that we need to glean.” Happy Friday — Thanks to everyone who wrote in this week. Please keep it coming: zwarmbrodt@politico.com.
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