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Macro: TMI Snapshot:  Cross-Currents In The US Rental Market Hint At Pausing Inflation Expectations and more

By September 16, 2020 No Comments

In today’s briefing:

  • TMI Snapshot:  Cross-Currents In The US Rental Market Hint At Pausing Inflation Expectations
  • UK: Return to Real Labour Begins in Jul-20

TMI Snapshot:  Cross-Currents In The US Rental Market Hint At Pausing Inflation Expectations

By Elan Gore

The past few weeks have seen a break (or pause) in the relentless march of TIPS inflation breakevens higher coming out of the depths of COVID-19 lockdowns.  We text-mine the global media for a wide range of inflationary & deflationary expressions, constructing diffusion indexes and sentiment indicators suggesting inflation expectations may have peaked for the time being.  Unlike past inflections, the current source of weakness (which remains theoretical) appears to originate in US coastal rental markets, but is now also aided by the downshift in crude oil.  As consensus has formed around elevated long-term inflation, dissonance with potentially shifting short-term data may test some of these notions.


UK: Return to Real Labour Begins in Jul-20

By Phil Rush

  • The unemployment rate increased to 4.1% in July but not because of falling employment. Normalisation in the labour force participation rate meant supply increased faster than demand. Low vacancies should drive the UR toward 7.5%.
  • Average weekly earnings have followed the “real-time” median and surged, with ex-bonus pay almost back to pre-Covid levels in July. The end of furlough for many workers raises hours and pay ahead of slack bearing down on the latter’s growth.

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