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from MacroScope:

Deconstructing UK job numbers

On the face of it, the good news for the British government keeps on coming. Britain’s economy grew surprisingly fast last year and inflation fell below the Bank of England’s target for the first time in over four years in January. The government this month even got a nod from the International Monetary Fund which only last year criticized its austerity programme.

The latest confidence boost came from jobless figures on Wednesday. Not only did the unemployment rate fall to a five-year low of 6.9 percent but pay growth caught up with  inflation for the first time in nearly four years. That provides Prime Minister David Cameron’s government with another lift ahead of the 2015 elections, after it has come  under fire from the Labour opposition for overseeing a fall in living standards.

But a closer look at the data suggests a more nuanced picture.

Indeed, total pay growth in February reached 1.7 percent – matching the 1.7 percent rise in consumer prices in February and above their 1.6 percent increase in March.

But excluding bonuses, wage growth was 1.4 percent  – below consumer price readings for February and March.

from Reihan Salam:

How to get Americans back to work

Friday’s Labor Department data shows an uptick in jobs, but an unemployment rate that remained steady from February to March. While the size of the labor force is increasing, the economy is not strong enough to get all would-be workers off the sidelines and into jobs.

Part of the story is that the fates of the short-term unemployed and the long-term unemployed have sharply diverged. The short-term unemployment rate, as Annie Lowrey of the New York Times has observed, is lower than its pre-recession level, while the long-term unemployment rate remains very high.

from Breakingviews:

A credible strategy for Barclays’ investment bank

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By Dominic Elliott
The author is a Reuters Breakingviews columnist. The opinion expressed is his own.

Barclays’ Transform plan needs urgent transformation. Chief Executive Antony Jenkins’ year-old strategy to revamp the UK lender is already struggling. First, the Bank of England jacked up gross equity-to-assets requirements last summer, necessitating a scrambled 5.8 billion pound rights issue and a one-year delay to the bank’s 12 percent return-on-equity target. Then Jenkins reneged on an assumed policy of reining in pay – and justified it with a decidedly pre-crunch declaration of needing to pay up to retain talent.

from Data Dive:

America’s job market: still not good enough

On Tuesday morning, the most recent Bureau of Labor Statistics Job Openings and Labor Turnover (JOLTs) data showed that the rate of hiring, turnover, and the number of open jobs was basically flat.

A little explanation: The hiring rate is the number of peopled hired as a percent of total employment. The JOLTs report also tracks the quits rate, which is the number of people who have voluntarily quit as a percent of total employment. Taken together, the quit rate and the hire rate represent a good proxy for the level of choice workers, particularly the already employed, have in the job market.

from MacroScope:

Weather to make February jobs report a crap-shoot too

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Blaming bad economic news on winter is getting as tiresome as tales of snarled traffic, flight cancellations and trips out with the snow shovel in freezing winds.

The February jobs report will be no exception to this U.S. season of climactic howling.

from Breakingviews:

U.S. is minimum-wage laggard given its prosperity

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By Martin Hutchinson
The author is a Reuters Breakingviews columnist. The opinions expressed are his own.

America is a minimum-wage laggard – at least relative to its economic prosperity. With Washington considering a higher pay floor and Peru’s prime minister losing his job over the issue, a Breakingviews analysis shows that minimum wages as a percentage of local income levels are still low in the United States and, for instance, in neighboring Mexico.

from MacroScope:

Why UK rates are well below “normal” in one labour market chart

Much ink has been spilled over the past several months over when the Bank of England will eventually raise interest rates from a record low of 0.5 percent, and if they'll do it before the Federal Reserve does. The pound is trading near a five-year high against a basket of currencies as a result.

BoE Governor Mark Carney and other Monetary Policy Committee members have tried to remind the public and businesses at every chance they are given that a rate rise is still a way off - likely at least a year - and that when it's time for the central bank to lift rates, it will do so gradually.

from Edward Hadas:

AOL, solidarity and health insurance

The head of the American internet company AOL managed to say something really stupid a few weeks ago, and to sound callous at the same time. It’s a shame Tim Armstrong came off so badly, because he was trying to deal with a serious topic.

Armstrong was trying to justify the company’s decision, since reversed, to trim its employees’ retirement benefits. He started out at a disadvantage, because the chosen cutback was sneaky. A change that sounds innocuous, moving from monthly to annual employer payments into employee pension savings accounts, is actually a way to eliminate payments to employees who leave before the end of the year. It’s hard to look honest and upfront when explaining that.

from Counterparties:

MORNING BID – But I never could find…(sha na na na, sha na na na na)

An odd jobs report sets the tone for what’s likely to be another choppy day in the markets – stock futures plunged, briefly, after the Labor Department said nonfarm payrolls grew by just 113,000, but the household survey saw a drop (again) in the unemployment rate to 6.6 percent on a big gain in jobs in that survey. An odd decline of 29,000 in government payrolls offset the overall about-at-trend-but-let’s-not-kid-ourselves-about-this-being-awesome 140,000 or so gains in the private jobs market, so there’s a little bit to like, some to shake one’s head at, and still more to wonder about how many people didn’t get to work because their feet froze to the ground when they tried to get into their cars.

(More seriously on that point – the establishment survey doesn’t get some kind of massive job loss just because of a storm on a particular day of surveying, so it’s not as if a snowstorm destroys job growth, so let’s not overstate the weather issue here. It’s a factor, but don’t look for a revision to +300,000 or something.)

from MacroScope:

Pinning down the January effect on U.S. jobs figures

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With Wall Street grappling to hold on to its record highs, a lot is riding on good news from the U.S. economy, no matter how high the Federal Reserve has set the bar for backing off its clear plan to end its monetary stimulus program this year.

After two huge upsets in a row on the important U.S. economic data releases since Christmas -- December non-farm payrolls and the January ISM manufacturing report, forecasters are lining up again for an improvement in hiring.

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