Daily update
Daily update
- US employment report Friday looms. Around 119,000 companies will be asked about their employees. Around 67,000 companies will not bother to reply. Markets will obsess about the data anyway. The expectation is for slower job creation (as measured by payrolls), with a stable monthly change in average earnings (which are not the same thing as wages).
- Uncertainty about immigration clouds US employment data. The household survey may be less likely to pick up on illegal immigrant employment than the payrolls survey. Increased immigration may improve trend rates of growth—directly by increasing the labor force and productivity, and indirectly by easing labor force bottlenecks that hinder other job creation.
- The possibility of a higher trend rate of growth matters to the economics of Federal Reserve policy, implying more spare capacity and a reason to cut rates. However, the politics of a labor market that is not unambiguously weakening is likely to limit expectations for an imminent rate.
- French industrial production and US service sector sentiment data are unlikely to animate investors. UK local election results will interest the politically obsessed—not because expectations about the general election outcome are likely to change, but because the results might hint at the size of the next government’s majority.
