Daily update
Daily update
- Friday’s US employment report will be revised, but the evidence could be a signal of some economic weakness ahead. The US has experienced very negative real wage growth—even when ignoring fictitious prices like owners’ equivalent rent. Consumers have supported living standards using credit and savings.
- If the savings and credit resources disappear, in the absence of pay bargaining power the consumer may take on more work to stabilize their living standards. That breaking point may now have been reached. Employment participation rose, especially in lower income sectors (which is one reason average hourly earnings slowed). The share of people with multiple jobs leapt above pre-pandemic norms. Higher prices may be changing behavior.
- There were riots in the government quarter of Brasilia, protesting the election of Brazilian President Lula. The insurrection in the US two years ago and last year’s opera bouffe coup plot in Germany are part of this trend. Economic structural change encourages scapegoat economics and prejudice politics, and attacking institutions and minority groups becomes normalized. Individual events may not be market moving, but investors should not ignore the trend.
- The Bank of England’s Pill, and some US Federal Reserve speakers are on the agenda. German November industrial production was weaker. Warmer weather may have softened utility output.
