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.
* Nonfarm productivity surprised higher in Q4 at 3.2% annualized (cons 2.5%) in preliminary data after Q3 was revised down from 5.2% to 4.9%.
* There have now been three extremely strong quarters of productivity growth, averaging 3.9% annualized since Q2 which has made it far easier for wage growth to be consistent with the 2% inflation target.
* The upshot is that unit labor costs only increased 0.5% annualized in Q4 (cons 1.2) after -1.1% in Q3, a significant helping hand in the return to 2% inflation.
* Powell yesterday: “you saw today's ECI reading. You know, the evidence is that wage increases are still at a healthy level, very healthy level, but they are gradually moving back to levels that would be more associated, given assumptions about productivity, are more typically associated 2% inflation. It's an ongoing process, a healthy one, and you know, I think we're moving in the right direction.”
* Waller last month questioned how much longer this productivity growth could continue for, but there's no sign of a material slowing in latest Q4 data which can help raise confidence in cutting against the strong output growth backdrop.
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.