Daily update
Daily update
- It is US employment report Friday (or “average earnings are not wages” day). Since mid-last year, the US has added almost 1.60 million jobs, and has also lost almost 0.25 million jobs depending on which bit of the employment report you read. Labor markets are changing—flexible working, changing industries like online retail, new jobs like social media influencers, the rise and fall of job hopping, side hustles and more self-employment, automation, volunteering, early retirement, and population movements. Data is not capturing these changes properly.
- Rather than obsessing about employment data signals, it might be better to focus on the consequences. The US labor market is not generating fear of unemployment—important as that is one of the few things that could break US consumer hedonism. However, real wage growth remains modest and nominal wage growth is slowing. This suggests the labor market supports a soft landing with moderate inflation.
- German February factory orders were weaker than expected. Germany is not well positioned in the balance of making things versus having fun, which is why southern European economies are partying and Germany seems left behind.
- There is more Federal Reserve speak today (a lot of it), but the tidal wave of US employment data is likely to overwhelm the noise.
