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Employment data. Can you bear the excitement?

| Posted by: Paul Donovan | Tags: Paul Donovan

  • The US employment report is normally exciting. It is getting harder to feel excited, however. The US is at full employment. Lack of workers, not lack of jobs, is likely to affect the payrolls data. Average hourly earnings are a poor indicator of wages (wage growth is around 3.3% y/y). This is not data that will change the economic outlook or the Fed's position.
  • Media reports suggest US President Trump will tie emergency relief for victims of Hurricane Harvey to the US debt ceiling. Treasury Secretary Mnuchin has said that aid spending will cause the debt ceiling to be hit earlier.
  • The ISM business sentiment opinion poll is due. Since 2010, the correlation of ISM orders with manufacturing output is negative. The correlation of ISM employment with manufacturing employment is negative. The correlation of ISM inventories with manufacturing inventories is negative. Economists' view of the value of the ISM is not necessarily positive.
  • The UK-EU or EU-UK divorce proceedings are proceeding as divorce proceedings normally proceed – with arguments about money. Early agreement looks unlikely, but then the EU track records on early agreements is not great. Italian revised GDP data is due today.