Just did a clean install. Oddly enough, when booting up, mouse responds immediately. But after a while it becomes choppy. I am still setting up the machine, so I have no heavy applications running.
One of those embarrassing problems once you see the fix. A very heavy iCloud download was the issue. Just let it download it's thing for a few hours then problem resolved by itself.
Hope this helps anybody else.
Check out this link: http://www.idownloadblog.com/2015/07/25/slow-jumpy-laggy-mouse-cursor-os-x/
Some USB 3 devices, hard drives in particular, can generate radio frequency interference that can cause Wi-Fi and Bluetooth devices operating in the 2.4GHz band to have issues communicating with your computer. Do not place hard drives or other USB devices behind the rear of your Mac near at the hinge of your screen. The antennas for Wi-Fi and Bluetooth are located there, and USB 3 devices placed there may interfere with your wireless connections.
The problem can stem from the radio frequency interference generated by the USB 3.0 hard drive. If you have external hard drive, you’ll need to remove them from around the vicinity of your MacBook’s hinge, where the Bluetooth radio is located. It’s best to relocate the devices further away if possible.