Daily update
Daily update
- There is something faintly absurd about trying to sum up something like a complex labor market in a single word. “Tight” or “loose” does not really do justice to the US labor market, which simultaneously has very low unemployment and very low real wage growth. This has been an exceptional period with very high labor market churn.
- There are two points for today’s US employment report. First, average hourly earnings are not wages. They are less and less useful as a proxy for wages at a time of structural change in the labor market, and when some workers are taking on multiple (lower paid) jobs. Second, the most important labor market issue is not directly measured—it is fear. If US workers become fearful of losing their jobs, precautionary savings will rise and spending will fall.
- Ongoing banking volatility in the US does have real economic implications. The hierarchy of questions is: which consumers have borrowed from which banks? Are those banks tightening lending standards? Is there unused credit left on credit cards?
- German factory orders were weaker than expected. French and Spanish industrial production data is due. French data takes place against a backdrop of strikes and protests, but French companies are used to this and may have adapted.
