Most if not all central banks are tasked with maintaining price stability and full employment. Employment Watch looks at recent employment trends and what they might mean for monetary policy around the world.
Unsurprisingly, given the weak inflation pressures, unemployment rates around the world are still in general above the level that central banks would consider full employment. Furthermore, while the rate in the US may be getting quite close to the NAIRU (non-accelerating inflation rate of unemployment), it should be remembered that many have left the workforce over the last few years. A better job market may tempt them back in the coming months and years, thus keeping wage pressures lower than would otherwise be the case.
Published in Investment Letter, November 2015
The views expressed in this communication are those of Peter Elston at the time of writing and are subject to change without notice. They do not constitute investment advice and whilst all reasonable efforts have been used to ensure the accuracy of the information contained in this communication, the reliability, completeness or accuracy of the content cannot be guaranteed. This communication provides information for professional use only and should not be relied upon by retail investors as the sole basis for investment.
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