Structural change and improvements
- The US and Europe continue to experience a moderate pace of economic growth – consistent with the end of deleverage but not the start of releverage. This is, however, against the backdrop of an awful lot of structural change.
- The US labour market is a good example of the issues. The US is really three labour markets – tight for skilled and semi-skilled labour, weaker for low skilled labour, with changes in self-employment complicating the picture.
- Structural change increases the relevance of today's data (personal income in particular) as better able to capture trends in income than average hourly earnings (which is about as relevant to the modern economy as a cassette tape).
- China gave out domestic price data, which is not especially interesting internationally. What matters is whether the weaker RMB generates lower export prices – if it does, it is a competitive devaluation, if not (perhaps the more likely outcome) it should not be seen as such.