Daily update
Daily update
- It is US employment report Friday, the monthly celebration of dubious quality data that always thrills markets. Looking at the broad picture of the US labor market, the position is what it has been all year. Firms are slower to hire, but not keen to fire. This gives job security, and supports consumer spending patterns.
- The average earnings data will receive some attention—as ever, average earnings are not wages, and wages are not wage costs. There is quite a lot of evidence that people have traded up to better quality jobs, which will raise average earnings but could in fact suppress wage cost growth.
- Oil prices spiked higher, driven by politics not economics. US President Biden appeared to suggest that Iranian oil facilities were a possible military target (although the Pentagon subsequently downplayed the remarks). Investors had assumed this was a low probability outcome.
- Details of the French government’s proposed tax increases on high income individuals and larger companies have emerged. Much stress has been placed on the temporary nature of the increases (although the budget deficit is an enduring problem). The US East Coast dockworkers strike ended after three days. This may add a little noise to economic data but the strike was not economically significant.
