31 Jul 2015
Wage inflation growing in importance post-FOMC – BTMU
FXStreet (Edinburgh) - Derek Halpenny, Head of European GMR at BTMU, noted the ECI as a better indicator of the wage inflation in the labour market.
Key Quotes
“Today’s Employment Cost Index is another report that will be important”.
“This gets a lot less attention than the wage data in the NFP report but is much more detailed and has been indicating a stronger pace of wage increase than the hourly earnings data”.
“The overall salaries and wage component increased on an annual basis by 2.6% in Q1 and if we get a consensus 0.6% Q/Q gain in Q2, the annual rate will decelerate modestly to about 2.4/2.5% - still indicating stronger wage growth relative to what’s reported in the NFP data”.
“That again will be enough to confirm a gradual tightening of the labour market conditions, consistent with what the FOMC is now telling us”.
Key Quotes
“Today’s Employment Cost Index is another report that will be important”.
“This gets a lot less attention than the wage data in the NFP report but is much more detailed and has been indicating a stronger pace of wage increase than the hourly earnings data”.
“The overall salaries and wage component increased on an annual basis by 2.6% in Q1 and if we get a consensus 0.6% Q/Q gain in Q2, the annual rate will decelerate modestly to about 2.4/2.5% - still indicating stronger wage growth relative to what’s reported in the NFP data”.
“That again will be enough to confirm a gradual tightening of the labour market conditions, consistent with what the FOMC is now telling us”.