Late summer is a good time to review our yearly progress and make adjustments in our asset our allocation decisions If needed. As a backdrop, our economy continues to expand and U.S. companies are leading another outstanding earnings season globally. Almost 80% of the companies in the MSCI USA index have raised guidance in both sales and earnings. By comparison, since the end of the global financial crisis, 63% of companies raised guidance in sales and earnings. The story is being repeated in almost all industry segments. The emerging markets have also enjoyed the same expansion and recovery. It is notable that both Europe and Japan are behind registering a modest 5% revenue boost.
On the supply side, the growth is being fueled by more productivity, more workers and a decline in the unemployed. Qualified workers are becoming harder to find which at some point will support larger gains in labor cost. In hindsight, the Trump tax cuts added stimulus to an economic recovery that was already underway putting the economy at risk of overheating. Market expectations see unemployment reaching 3.6% in the 4th quarter dropping further to 3.5 in 2019 and 2012. According to the JP Morgan and the Federal Reserve is likely that we will see 4 rates hikes through the 1st half of 2019 to put a modest damper on the rate of growth that we are currently experiencing. Floating rate bonds were designed to adjust payments in a rising rate economy. I plan to review and adjust our allocation upward if long-term rates warrant a move.