UBS On-Air: Market Moves UBS On-Air: Paul Donovan Daily Audio 'Hiring, firing, and imprecise data'
4 snips
Jun 6, 2025 The reliability of employment data is called into question as the US May report approaches. Average earnings are misrepresented and don’t reflect true wage trends, complicating the Federal Reserve's policy decisions. Meanwhile, the restaurant and leisure sectors show weakness, possibly skewing average earnings higher without impacting wages. The discussion shifts to the challenges organizations face in hiring and firing, highlighting how imprecise data complicates leadership decisions.
AI Snips
Chapters
Transcript
Episode notes
Employment Data Quality Concerns
- US employment data quality has worsened in recent years, leading to frequent sizable revisions.
- Average hourly earnings do not equate to wages, especially with downturns in lower-paid sectors like leisure and restaurants.
Fed's Data Dependency
- The US Federal Reserve is data-dependent and looks to the labor market to trigger policy moves.
- Rate cuts are unlikely to stimulate hiring amid uncertainty but may help if consumer demand drops enough to cause firings.
ECB Rate Cut and Outlook
- The ECB recently cut rates, though future easing remains uncertain, with cautious signals from President Lagarde.
- Market expectations for rate cuts have softened following the ECB's press conference remarks.