by Calculated Risk on 11/02/2015 08:02:00 PM

An excerpt from a research piece by Goldman Sachs economist Alec Phillips on the impact of the budget deal:

• The budget deal that the President signed into law today allows for greater federal spending in 2016. Along with a slightly positive trend at the state and local level, it should result in a modestly expansionary fiscal stance (+0.3% of GDP), for the first time in five years.

• The agreement looks likely to raise the federal contribution to quarterly GDP growth primarily in 1H 2016. Since Congress has already funded the government through mid-December at the lower 2015 level, we do not expect the deal to affect the current quarter.

• The budget deal removes most of the remaining fiscal policy uncertainty through the 2016 election. Congress still needs to pass spending bills by December, but the risk of a government shutdown at that point appears low.

Tuesday:
• All day: Light vehicle sales for October. The consensus is for light vehicle sales to decrease to 17.7 million SAAR in October from 18.1 million in September (Seasonally Adjusted Annual Rate).

• At 10:00 AM, Manufacturers' Shipments, Inventories and Orders (Factory Orders) for September. The consensus is a 0.9% decrease in orders.