Labor markets - glass half full (probably)

Posted by: Paul Donovan

13 Jan 2020
  • The US labor market is either softening or showing strength. Non-farm payrolls (a much revised figure) were below expectations. However, payrolls have been growing significantly faster than is sustainable. Underemployment hit an all-time low. These old fashioned methods of labor market data have not kept up with structural changes in the modern economy, but overall the US labor market is supporting the consumer.
  • The weekend saw protests in Iran against the government, following the admission that the Iranian military downed the Ukrainian airplane last week. Oil markets have not reacted. International political tensions with Iran affect markets because there is a threat of disruption to other economies. Iran is too small an oil producer for domestic tensions to directly be a concern for markets.
  • The UK offers industrial production, trade and monthly GDP data. The numbers predate the general election and the next stage in the interminably tedious EU-UK divorce process. This may lessen their impact in financial markets somewhat.
  • German wholesale prices may be worth a glance – Eurozone inflation numbers have occasionally surprised investors positively of late. Taiwan's President Tsai was re-elected over the weekend, as expected. There are a couple of US Fed speakers on the agenda.

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