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Why MNI
MNI is the leading provider
of intelligence and analysis on the Global Fixed Income, Foreign Exchange and Energy markets. We use an innovative combination of real-time analysis, deep fundamental research and journalism to provide unique and actionable insights for traders and investors. Our "All signal, no noise" approach drives an intelligence service that is succinct and timely, which is highly regarded by our time constrained client base.Our Head Office is in London with offices in Chicago, Washington and Beijing, as well as an on the ground presence in other major financial centres across the world.
DATA REACT
Wells Fargo's reaction to May's employment report is that "the biggest challenge to the labor market's recovery right now is labor itself", namely availability/supply.
- Strong avg hourly earnings growth means "businesses are rapidly raising wages in an effort to lure workers back to the jobsite as a result... with compositional effects unable to explain away the strength." Notably, leisure and hospitality wages are soaring, as employers are facing difficulty securing workers (see chart).
- This could be inflationary down the road: "Wage pressure should persist in the coming months and could further add to the broader inflationary environment."
- They expect though that we'll see faster payrolls growth in the coming months as factors constraining supply abate, including fear of catching COVID, federal unemployment benefits, and childcare issues.
- But "with payrolls still 7.6M below their February 2020 peak, a full recovery looks unlikely until late 2022 or even early 2023. The more moderate pace of hiring will keep the Fed waiting a bit longer for "substantial further progress" on the labor market front, although firming wage pressures suggest the Fed may need to broaden out its definition of progress."
Wells Fargo citing BLS.
Why MNI
MNI is the leading provider
of intelligence and analysis on the Global Fixed Income, Foreign Exchange and Energy markets. We use an innovative combination of real-time analysis, deep fundamental research and journalism to provide unique and actionable insights for traders and investors. Our "All signal, no noise" approach drives an intelligence service that is succinct and timely, which is highly regarded by our time constrained client base.Our Head Office is in London with offices in Chicago, Washington and Beijing, as well as an on the ground presence in other major financial centres across the world.
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