Labour
BoJ paper sketches ‘vicious circle’ behind productivity traps
“Lacklustre” economic reforms and firms’ unwillingness to innovate may create a “negatively reinforcing” loop, the authors warn
Technology driving inequality in advanced economies – IMF
Technology plays “dominant role” in explaining falling labour share of income in advanced economies, study finds; globalisation more important for emerging markets
BoE’s Saunders expects higher post-Brexit growth than central forecast
Bank of England’s newest committee member says the labour market is likely to prove more sluggish than the consensus suggests, but growth will be more positive
Okun’s law is empirically robust but presents modelling problems, researchers say
Economists need to find more sophisticated methods to model the relationship between financial and labour markets, say the authors of an occasional paper published by the ECB
ECB data reveals changes in eurozone wage rigidity
ECB publishes its third survey of wage dynamics in the eurozone; it argues data is “crucial” to designing monetary and other macroeconomic policies
Iceland’s new macroeconomic council faces up to wage challenges
Collaboration between government, central bank and labour market groups aims to bring bouts of rapid wage growth under control and better co-ordinate policy
Technical issue affects Fed minutes release
Error in Federal Reserve equipment results in early release in some cases and late in others; minutes show Fed officials grappling with uncertainty amid slowing job growth and UK referendum fallout
Yellen says July hike ‘not impossible’ as Fed holds
Fed keeps policy unchanged as widely anticipated; expected path of interest rate hikes becomes more gradual while the long-run level is revised down again
Yellen upbeat but concerned by weak jobs data
Janet Yellen expects continued progress to Fed’s objectives; says latest labour market report is “concerning” but warns against reading too much into it
US jobs report puts Fed hike expectations on ice
Small increase in non-farm payrolls leads market to all but write off prospect of a rate hike later this month; Lael Brainard and Eric Rosengren keen to see more data
Fed presidents navigate ‘mixed signals’
Dennis Lockhart is putting more weight on positive employment picture than disappointing growth stats; both he and Robert Kaplan see potential for labour force to expand
Inflation and unemployment affect wage rigidity, Icelandic authors find
Research challenges New Keynesian assumption that timings of wage changes are exogenous, showing level of inflation and unemployment also matter
‘Compositional’ drag on wages set to fade, BoE article finds
Labour force composition has changed markedly in recent years, putting downward pressure on wages, but recent data implies the effect may soon dissipate, researchers say
BoE’s Weale sees shorter working week adding to inflation
Various measures suggest UK workers will gradually cut back on the number of hours they work over the next few years, adding to unit labour costs, external MPC member says
BoE’s Shafik says wages key to rate hike
Deputy governor says economy has been difficult to read in recent years but stronger growth in wages would be a major factor in prompting her to vote for a rate hike
Economists point to key factors for BoE rate decision coming into ‘sharper relief’
Developments in labour market represent crucial signal for monetary policy move, but shocks from a Fed hike, commodities or further turbulence in emerging markets could all come into play
Rising Swedish bank wages do not reflect rising talent, Riksbank paper finds
Researchers exploit large database of worker skills to assess why Swedish bank wages have risen so sharply in recent years, finding it is not because bankers have become relatively more talented
Mexican paper sees need for ‘combination’ of policies to reduce informal labour
Measures to reduce entry barriers to and relative value of formal labour could be in order, working paper published by Bank of Mexico finds
Cycles in Korean unemployment explained ‘mostly’ by domestic shocks, paper finds
Working paper estimates a new Keynesian model with labour market frictions, designed to mirror the Korean economy, to study relationship between different shocks and dynamics
Minneapolis Fed president open to cutting rates
Narayana Kocherlakota stresses room for improvement in US labour market, noting low inflation could give the Fed space to pursue more accommodative policy
Iceland hikes again amid inflation shock
Large wage increases force central bank to reassess its inflation forecast and hike rates for a second meeting in a row, with more likely to follow
RBA’s Kent seeks to explain divergent labour and growth outcomes
Assistant governor says range of factors may have contributed to a unexpectedly strong performance of Australian unemployment, even as growth remains subdued
Lockhart says Fed liftoff is ‘close’
Atlanta Fed president highlights ‘cumulative evidence’ of economic recovery and says he is willing to sanction the first rate increase in the face of ‘mixed data’
Bank of England faces conundrum from contradictory data
Economy appears to be giving contradictory signals as slack shrinks and wages rise but employment disappoints and inflation stays low; MPC votes for hold