US hike hints and labour issues
- Employment report Friday from the US, a day after four (four!) Fed speakers reminded us that June is a possible date for raising rates. The Fed members probably did not have knowledge of the employment report, and anyway data dependency means trends in data, not single (much revised) points.
- The evidence of wage growth is that the US labour market is tight for skilled and (increasingly) semi-skilled labour. At some point the inability to find workers to fill vacancies must start to limit the growth of payrolls.
- Early results from UK local elections will be looked to as a guide for the referendum on EU membership in June. So far the anti-EU UKIP seems to have taken roughly the same share of the vote as at the general election. Turnout, which could be an important factor in June, appears subdued.
- A longer term issue to consider is a report from the World Bank on water as a constraint on economic growth. This fits with the idea of an environmental credit crunch, an issue which is starting to shape infrastructure spending in places like China.