Is the US labour market at full capacity?
- The Bank of Korea cut rates by 0.25%. We had expected the Bank to ease policy as the economy seems unlikely to meet the government's growth targets, but the move came earlier than investors had anticipated. More rate cuts seem likely later this year.
- US job data released yesterday once again raises the possibility that the low payrolls figures are caused by a lack of supply of skilled and semi-skilled labour, rather than a lack of demand for labour. The job openings figure, representing new vacancies, continues to climb.
- In the UK referendum a member of parliament has switched her support from "leave" to "remain". This is unusual as polls suggest that those favouring exit tend to focus on immigration, while those favouring remain tend to focus on economics. Such a polarisation does not suggest a switch is easy.
- Greek consumer price deflation data is expected today – and serves to highlight the continued divergence of inflation experience in the Euro area. German labour costs rose 3.1% in the first quarter, and rising labour costs are likely to feed into higher inflation.