WASHINGTON, DC – The LSEG/Ipsos Primary Consumer Sentiment Index for June 2024 is at 53.8. Fielded from May 24 – June 7, 2024, the Index is down 0.5 point from last month.   The index decreased slightly this month. It now sits about four points above its reading from this time last year (49.6). Source: LSEG / Ipsos. Upload the full report here.

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

The Greek government has announced plans to give €2,000 for every child born in Greece, to curb a plunging birth rate and improve the supply side of the economy over the medium term. The recent crisis led to a national brain drain which affected the economy by reducing the working-age population by 7%. However, the economy’s revival has slowed the rate of emigration, with fewer people leaving as domestic employment recovers. As well as aiming to increase the size of the workforce, the government is aiming to make better use of its existing pool of labour. Greece has a well-educated

The latest reading from Fathom’s China Momentum Indicator (CMI 2.0) combines the first two months of the year, a period for which the data are often patchy and notoriously difficult to interpret due to Chinese New Year. For now though, it appears that China’s policymakers are continuing to prioritise growth over reform, cushioning the slowdown by resorting to old-model growth tactics. Refresh the chart in your browser | Edit chart in Datastream The usual data discrepancies around this time of year, combined with the construction of our CMI 2.0, mean that the second half of 2018 now looks weaker than in December’s

Fathom’s measure of the spare capacity in China’s labour market, the proprietary China Underemployment Indicator (CUI), suggests that around 14% of China’s labour force is underutilised or unemployed, performing roles with relatively little or no economic return. A glaring example of this is the time taken to complete the construction of a residential property in China, which according to Fathom’s proprietary measure is now a staggering seven years, reflecting both the mothballing of properties in the construction phase and a reluctance to declare them as ‘vacant’ even when they are complete. As explained in a note sent to clients last week,

Fathom retains a pessimistic view of the euro area’s long-term prospects, unless progress is eventually made towards transforming the currency bloc into a fully-fledged fiscal union. There are, however, tentative signs of progress in this regard, with President Macron of France proposing a series of reforms to address some of the euro area’s structural flaws. In any case, Fathom acknowledges that the near-term outlook is far brighter, with the union’s strong cyclical upswing expected to continue this year. In few places are the short-term signs more encouraging than in Germany. On a calendar-adjusted basis, its economy grew by 2.5% in

“Reports of my death have been greatly exaggerated” is one of Mark Twain’s more frequently referenced quips. Leaving aside the fact that it is a slight misquotation, it is an amusing line, and one that neatly captures Fathom’s belief in the continued validity of the Phillips curve. There is a widespread perception that the relationship between labour market slack and inflation is, at best, diminished and, at worst, no longer intact. Fathom does not subscribe to this view. Instead, we believe that the impact of changes in unemployment on a worker’s remuneration has been masked by a sustained decline in

Last week, the UK Monetary Policy Committee struck a more hawkish tone, arguing that “some withdrawal of monetary stimulus [was] likely to be appropriate over the coming months”. As a statement of intent, we would not read much into this. Having struggled to rationalise the unexpected weakness in business investment and net trade in the second quarter, the Committee appears to be relying on consumer expenditure being firmer than forecast in order to justify the maintenance of its 0.3% GDP growth estimate for Q3. But data released last week confirmed our suspicion that the consumer squeeze intensified going into the

Refresh the chart in your browser | Edit chart in Datastream Want more charts and analysis? Access a pre-built library of charts built by Fathom Consulting via Datastream Chartbook in Thomson Reuters Eikon. Steadily falling unemployment in the euro area has not translated into any significant increases in wages; increases in quarterly compensation per employee have averaged only 1.3% since 2014. This has been a key reason for why core inflation has flatlined since then. We suspect that labour market slack might be significantly higher than that suggested by the headline unemployment data. Despite the unemployment rate falling to pre-euro-crisis lows, a more detailed look into

Dissecting France’s productivity performance Emmanuel Macron has convincingly defeated Marine Le Pen to become President of France. Although we have not passed peak protectionism, we can shift our focus back to worrying about the actual economics – at least in France’s case for now. According to Nobel laureate Paul Krugman: “Productivity isn’t everything, but in the long run it is almost everything.” We concur.   What explains France’s ‘productivity puzzle’, i.e. the country’s outperformance of its peers on the GDP per hour measure, but not the GDP per capita measure, and the divergence between the two gauges of productivity in

On Tuesday 9 May, we presented an overview of our Global Economic and Markets Outlook for 2017 Q2 at an event hosted by Thomson Reuters in London. We were joined by former Bank of England policymakers Paul Fisher, Ian Plenderleith and Sushil Wadhwani. Fathom Director Erik Britton began by setting out what, in our judgment, is the most likely outcome for the global economy. Despite wobbles over his initial failure to replace Obamacare, our central scenario sees US President Donald Trump enact a substantial fiscal stimulus package. There is a material pick-up in growth, with the US economy expanding by

The ongoing decline in US jobless claims is striking, but they are not as useful as a barometer for the US labour market as they once were. US unemployment insurance is capped at 26 weeks and with long-term unemployment still elevated, the unemployment benefits of many have simply expired. This might explain why the ratio of continuing claims to total unemployment is close to the lowest on record, as highlighted by the chart below. Refresh the chart in your browser | Edit chart in Datastream Short-term unemployment, by contrast, is close to a 40-year low, explaining the impressive declines in