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Labour diversity

| Posted by: Paul Donovan | Tags: Paul Donovan

  • Friday's US data gave a snapshot of an economy performing relatively well – better sentiment and a strong labour market performance. One should never take a single data point as indicative of an economy, but that has not stopped markets from reacting.
  • The US labour market is not a unified labour market – there are at least three (skilled, semi-skilled and unskilled) which do not share the same circumstances. Persistent weak labour conditions for low skilled labour in any economy risks the rise of anti-parties and scapegoat economics, as we wrote recently.
  • Rosengren of the Fed and Praet of the ECB are both scheduled to speak today – Fed speakers are perhaps more interesting in the wake of Fed Chair Yellen's attempts to position herself behind the curve on rising US inflation.
  • Euro data includes producer price inflation. Because companies sell to other companies more than they sell to consumers, this is a better indication than CPI of pricing power – the stronger Euro will have lowered export PPI in euro terms.