Wage inflation growing in importance post-FOMC – BTMU

FXStreet (Edinburgh) – Derek Halpenny, Head of European GMR at BTMU, noted the ECI as a better indicator of the wage inflation in the labour market.

Key Quotes

“Today’s Employment Cost Index is another report that will be important”.

“This gets a lot less attention than the wage data in the NFP report but is much more detailed and has been indicating a stronger pace of wage increase than the hourly earnings data”.

“The overall salaries and wage component increased on an annual basis by 2.6% in Q1 and if we get a consensus 0.6% Q/Q gain in Q2, the annual rate will decelerate modestly to about 2.4/2.5% – still indicating stronger wage growth relative to what’s reported in the NFP data”.

“That again will be enough to confirm a gradual tightening of the labour market conditions, consistent with what the FOMC is now telling us”.

Derek Halpenny, Head of European GMR at BTMU, noted the ECI as a better indicator of the wage inflation in the labour market…

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