Are there enough workers to do the work that needs to be worked?

Posted by: Paul Donovan

08 Mar 2019
  • The US employment report should be consistent with ongoing strength in the labor market. However, there are hints that lack of labor supply could limit growth in payrolls (if there are no workers to hire, payrolls do not rise). Average hourly earnings are not wages, but will no doubt be reported as wages.
  • Assorted industrial production numbers are due in the Eurozone. The manufacturing of consumer goods should be OK because (generally) global consumer spending is OK. Investment spending has been somewhat softer, and that has been reflected in the recent production of investment goods.
  • The ECB's policy decision will still be considered by markets. There was not that much that was unexpected in the forecast revisions, nor in the decision to smooth the ending of the ECB's bank lending programs. The surprise was the early announcement of the bank lending program policy. It was more dovish spin than dovish substance.
  • Japanese growth was revised higher at the end of last year. The details were not especially inspiring – inventories and some improvement in capital spending. However, Japanese incomes remain relatively firm and that may provide a basis for some consumer spending contribution to the domestic economy in 2019.

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