Profits push up prices
Posted by: Paul Donovan
Daily update
Daily update
- Yesterday’s US unit labor cost numbers are subject to possible future revisions, but showed non-financial corporate profits growing faster than labor costs. In fact, profits have growth faster than labor costs for seven of the past eight quarters, as prices have growth faster than labor costs for seven of the past eight quarters. Today’s inflation is more about margin expansion than labor costs.
- Germany made a series of arrests around a coup d’état plot. Markets did not really react, but this is a symptom of issues markets do need to worry about. The rise of single issue politics, scapegoat economics, and prejudice politics are all consequences of the structural changes that make up the fourth industrial revolution and are all very relevant to investors.
- ECB President Lagarde speaks, again. It is possible that there is some new information since we last heard from ECB President Lagarde (on Monday). It is not likely there is any new information. If ECB President Lagarde is moving towards providing a daily economic commentary, after a quarter of a century of doing this I would like to point out that I was here first.
- The UK RICS house price measure weakened (not a surprise following the mortgage market turmoil). US initial jobless claims numbers are due.
