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Employment report excitement

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  • US employment report Friday (a cause of much excitement in the world of economics). We believe that the report should signal ongoing strength in the US labour market, with payrolls rising 270,000 and the unemployment rate moderating to 5.7%.
  • There is clearly a division of US labour, with excess capacity for low skilled workers (constraining measures like average earnings) but tighter conditions for higher skilled workers (contributing to unit labour costs, for instance).
  • The ECB's Couere said yesterday that the Greek election would have no bearing on the ECB's decision as to whether to buy Italian (and other) government bonds at 22 January meeting. We get German and Spanish industrial production today.
  • UK industrial production (oil price impacted) and trade data are due. The US has two sets of Fed comments - Evans and Lacker - following from the standard dovish fare from Rosengren yesterday. Chinese inflation ticked up to 1.5% but this is a purely Chinese concern with no global read through.

Listen to the audio version of this briefing.