Labour market data and productivity

On Tuesday, we will know how the labour market moved in the three months to September and consequently productivity performance in the third quarter.

The labour market kept beating records in the last year with unemployment at a historical 4% low and employment at 75.5% close to the record high of 75.7% registered between March and May 2018. We expect data very close to or completely untouched in this release.

We will also keep a close eye on the figures on earnings after the 3.1% increase in regular wages registered in the last release. Manufacturing wages, after the quick pick-up at the end of last year, have slowed down much faster than the whole economy with a meagre 2.3% increase in the last publication.

Much different is the situation for construction, where constraints have pushed wages very high, and the public sector where employees received the highest salary rise in years.

Inflation

The next day it will be all about prices and, as always, our focus will be on CPI and PPI.

Last month CPI for September came in at 2.4% down from 2.7% of the previous month. However the downward trend may not be visible in October mainly due to base effect, indeed even an unlikely 0% increase in prices in the month will just keep annual CPI at 2.4%.

On the PPI side, we will see how and if manufacturers are feeling the pressure of volatility in the commodity markets on both the input and output side.

Have a good week and stay tuned!