As we noted earlier this week, a recent report from Markit/KPMG/REC showed that demand for permanent staff in the UK is at its highest level since 1998 – a far cry from the fears of a triple-dip recession when the year began. Meanwhile, the availability of permanent staff is at levels associated with the latter stages of a recovery, when employers struggle to find staff and are willing to pay higher salaries.
Beware the wrong kind of wage growth
With the current unemployment rate about 3 percentage points above its recent trough, we think it’s too early to call this an overheating labour market. Still, these surveys do imply that wage growth could accelerate significantly in the medium term if structural factors like a shortage of skilled labour were to combine with continued strong growth and loose monetary conditions. This would put pressure on the Bank of England (BoE) to raise rates earlier than its forward guidance currently suggests.
WASHINGTON (Reuters) - U.S. producer prices fell for a third straight month in November, pointing to a lack of inflation that could give the Federal Reserve pause as it weighs the future of its monthly bond purchases.
The Labor Department said on Friday its seasonally adjusted producer price index slipped 0.1 percent as gasoline prices maintained their downward trend.
Prices received by the nation's farms, factories and refineries had dipped 0.2