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Laboring on

| Posted by: Paul Donovan | Tags: Paul Donovan

  • The US employment data lacks its normal power to influence markets. The direct and indirect impact of the hurricanes will distort the numbers. Expectations are that non-farm payrolls will be lowered by fifty to sixty thousand by the weather. Policy makers will focus on medium-term trends.
  • Japanese workers experienced stronger-than-expected pay increases in August (cash earnings rose 0.9%). That is a positive real income gain, using actual inflation rates. Unfortunately, most Japanese households believe that inflation is far higher than it actually is, so the perception of real income may not be positive.
  • UK unit labor cost data is due. This is not a high profile data release, but matters to UK competitiveness as the UK-EU EU-UK divorce proceedings loom. The Bank of England's Haldane is due to speak, with investors anticipating that the emergency September rate cut of last year will be taken back.
  • The calendar is littered with US Federal Reserve speakers. US policy this year has been fairly clearly signaled, and policy next year will be conducted by a very different Fed. German factory orders data was significantly stronger than expected. Italian retail sales data may provide a contrast as to relative economic momentum.