PRODUCTIVITY PERFORMANCE

Markets were somewhat perturbed by August M-o-M wage growth of 0.4%. They needn’t be. The main driver was a huge 0.9% increase in technology, the fastest pace since 8/22. Moreover, with productivity rising at a stellar 2.5% Y-o-Y, wage growth could be as high as 4.5%, it’s currently 4%, without causing inflation to exceed 2%. Lastly, unemployment has risen from 3.8% to 4.2% Y-o-Y, putting downward pressure on wage growth.