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US labour cost pressures

| Posted by: Paul Donovan | Tags: Paul Donovan

  • Service sector sentiment comes out in the PMI figures. These are less likely to be swayed by the movements of currencies (which may be a distorting factor in the manufacturing data – if so they may serve as a better reflection of real activity, albeit still prone to excessive media influence.
  • US unit labour cost and productivity data is due. The labour cost figures are likely to support the idea of ongoing increases in inflation pressures, as unit labour costs account for around 70% of the US price basket when properly disaggregated.
  • The Fed's Beige Book also gave evidence of rising wage pressures (albeit selectively), along with consumer spending. Fed President Williams noted that little had changed in the economic outlook from December, but quite explicitly ruled out negative rates in the event of a downturn.
  • The Peoples' Congress in China is getting some investor attention – its impact on the world economy is probably limited, but any efforts to close inefficient productive capacity could be of interest. The US Republican Presidential candidates have a debate tonight.