Sometimes, Wall Street needs a cull. One such moment arrived seven years ago, when firms like Morgan Stanley and Goldman Sachs faced up to the realization that trading fixed-income securities was not the money-spinner it had been in the past. Heads rolled. Now big banks are bracing for another big adjustment, as the surge in revenue created by two years of wonky markets and exuberant dealmaking comes to an end. This time the cuts are likely to be shallower, but still traumatic. Wall Street firms’ workforces have swelled along with their coffers since the end of 2019. Morgan Stanley has

US nonfarm payrolls increased by 559K in May. While this was below consensus expectations of a 650K gain, it represented a strong increase after a disappointing rise of 278K in April. Overall job gains were driven by increases of 292K in leisure and hospitality, 87K in education and health services and 67K in government. The unemployment rate is now at 5.8%, the lowest since March 2020, but still well above the pre-pandemic rate of 3.5%, and the employment-to-population ratio is around 3 percentage points lower. All in all, the May numbers represent a welcome improvement, although they are unlikely to

Fathom’s euro area Economic Sentiment Indicator (ESI) weights together survey measures of household and business confidence to gauge underlying economic sentiment. The aggregate euro area ESI fell 0.1 percentage points to 0.3% in April, its lowest level since December 2014. Sentiment has been trending down since the beginning of 2018 in Germany, France and Italy, driving the weakness in the aggregate euro area ESI, while it has been broadly stable in Spain and Portugal. Refresh the chart in your browser | Edit chart in Datastream The Italian ESI has seen the largest deterioration of the three countries, falling from 1.2% in January

It was International Women’s Day (IWD) last week. In the economic press, IWD has become an annual exploration of wage inequality between men and women. According to the latest research, the UK’s gender pay gap is 18% – a high number indeed. But perhaps the biggest source of income inequality between men and women around the world stems from their differing rates of employment.   Refresh the chart in your browser | Edit chart in Datastream Before anyone can enter employment, they must first actively seek work. They must, in other words, participate in the labour force. In almost all

Despite a strong Q2, South Africa’s economic outlook remains bleak South African GDP expanded at an annualised rate of 3.3% in Q2, aided by a rebound in mining. But the country’s economic outlook remains bleak. China’s decision to ‘double down’ on its investment-led growth model has provided South Africa some breathing space, but headwinds, including persistently high unemployment, remain. Political developments are an additional woe, and have been the focus of recent investor concern. Looking ahead, the economy’s structural weaknesses, exemplified by poor labour market dynamics, are likely to impair its growth performance. Data revealed that South Africa’s (SA’s) GDP

In response to last week’s UK referendum result, investors have slashed the already low probabilities previously assigned to the prospect of US interest rate increases. Currently, the chances of a hike even by the end of next year are seen as just 26%. In our view, investors would be wise to consider the possibility that the US labour market is close to full employment. Refresh the chart in your browser | Edit chart in Datastream After last week’s UK referendum, a tightening of US interest rates next month is all but impossible, even if the next nonfarm payrolls report confirms

We have long doubted China’s official GDP data. Now we turn our attention to China’s labour market data. Over the past ten years or so, the headline unemployment rate has fluctuated between 4.0% and 4.3%. We find it implausible that the degree of slack in China’s labour market can appear so rigid, at a time when the pace of economic growth in China has varied enormously. Here we introduce our own, top-down measure of the amount of spare capacity in China’s labour market. Our China Underemployment Indicator (or CUI) suggests that the degree of underemployment in China may have trebled

Friday’s non-farm payrolls data revealed that the US economy added an impressive 271,000 new jobs in October. This exceeded expectations, with nearly 100,000 more people finding work than had been forecast, on average, by a group of economists.