The picture is continuing much the way we thought it would. We remain unsurprised at today's (30th April 2024) latest US economic data which were released by the Bureau of Labor Statistics (BLS). The picture has emerged that US labor costs, a key metric closely monitored by the Federal Reserve, surged in the first quarter, surpassing expectations of many market analysts and highlighting persistent wage pressures that are contributing to elevated inflation levels.
According to the BLS, the employment cost index (ECI), which gauges wages and benefits, rose by 1.2%, marking its most significant increase in a year. This exceeded all forecasts in a (Bloomberg) economist survey. In response to the data release, stock-index futures dropped, Treasury yields climbed, and the dollar strengthened.
The robust rise in labor costs, coupled with recent reports indicating stubborn inflationary pressures, raises concerns about the Fed's ability to steer inflation back towards its targ ...
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