Economics

  • Employment is up, but are the jobs of any quality?

    Are Quality Jobs being Created?

    The pessimists have claimed that the US is generating low paying jobs. Nearly every monthly jobs report is followed by what seems to be a canned retort.  The media picks up on the story and continues to regenerate it.  Earlier in the recovery, the argument made sense.  It makes less sense now. 

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  • Investors have been a bit fickle about central bank rate changes.

    Investor Response to Rate Change Prospects has been Uneven

    Disappointing industrial output figures from Germany and UK are helping stabilize the US dollar after yesterday's shellacking.  Investors have been fickle about the prospects for a rate hike this month, and the unexpected dramatic slide in the service spurred a downgrading of such expectations, and a flight out of the dollar.  It was not simply a quest for yields, though that was part of it.  Surely, the yen and euro's strength is not a function of superior yields than the US. 

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  • ASEAN has always faced challenges, this time it is irrelevancy.

    Hollowing Out of ASEAN is the Latest Risk

    Vientiane will host the 28th ASEAN Summit this week, with the summit documents rotating around the same themes that ASEAN has been promoting for decades: unity and centrality. The worry, both at the upcoming summit and beyond, is that there is little effort to put substance into these goals.

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  • BRICS style governance comes through the G20.

    BRICS Governance through the G20

    Brazil, Russia, India, China and South Africa (BRICS) have existed as a coherent economic group since 2009. They represent approximately 40 percent of the world population, generate approximately 20 percent of world output, have accounted for 50 percent of global growth since the end of 2009 and play a crucial role in developing industries dominated by global value chains.

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  • The RBA is the first of four central banks to meet this week.

    Another Round of Central Bank Meetings begins Down Under

    The US dollar is trading heavily against most of the major and emerging market currencies. However, the losses are modest, and the greenback remains within recent ranges.  The Antipodean and Scandi bloc currencies are performing best. 

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  • While the US paused, other world economies were moving and shaking.

    Meanwhile, the Rest of the World Markets had a Work Day

    Several developments took place while US markets were closed for its Labor Day holiday.  Most of the economic news was favorable.  This included a strong snap back in the UK service PMI,  more evidence that the moral suasion campaign to lift wages in Japan is yielding some success and a rise in the Caixin's  China's service PMI. 

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  • Can a US-Singapore relationship move beyond symbolic visits?

    After a Symbolic Visit, what is next for US-Singapore Relations?

    Singapore Prime Minister Lee Hsien Loong paid an official visit to the United States at the invitation of outgoing US President Barack Obama from 31 July to 5 August 2016. Apart from the symbolic significance of the trip — which included the rare honour of a state dinner to commemorate 50 years of their diplomatic ties — the visit capped efforts by both countries to strengthen their strategic partnership during the two terms of the Obama administration.

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  • Reserve bank watchers move their collective attention to the ECB.

    ECB Grabs Central Bank Watchers' Attention

    The last two weeks have been about the US.  First, it was Jackson Hole. The leadership of the Federal Reserve, Yellen, Dudley and Fischer sang from the same songbook. They all signaled that the time was approaching to take another step in the normalization of monetary policy, without specifying precisely when.

    Then it was the US employment report, which Fischer had specifically identified as important.

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  • The dollar does not cave to disappointing jobs data.

    Buck(ing) the Data

    The US dollar showed an unexpected resiliency to the disappointing August employment data.  The dollar's resilience in the face of the jobs data may reflect that many see the report did not alter investors' or policymakers' information set.  It did not sway opinion very much for or against a move.  There is not much market-moving data from the US next week outside of the ISM non-manufacturing report.

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  • Wage stagnation and income inequality are the new employment watchwords.

    Working (Harder) for a Living

    On Labor Day, politicians have traditionally paid lip service to the plight of the worker, whom the national holiday is meant to honor. With working-class struggles taking center stage in this year’s election, we will likely hear from them more than usual talking about the steps they will take to reduce income inequality or end three decades of wage stagnation.

    Some of them will go one step further and voice support for unions and collective bargaining, both of which have declined at the same time wages have stagnated.

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