Week in review
- China Markit PMI for manufacturing rises to 51.1
- U.S. job openings rise to 8.756 million in February
- Eurozone inflation falls to 2.4% y/y for March
Week ahead
- Australia consumer confidence and business conditions
- U.S. CPI inflation
- RBNZ official cash rate
Thought of the week
The pandemic highlighted the dramatic impact on inflation when supply is restricted, as goods prices surged and workers were increasingly hard to find. However, the reversal of these supply constraints is a key reason why inflation pressures are easing in the U.S. even as the economy expands at a faster-than-expected pace and growth estimates are being revised higher. The supply of labour has become central to the outlook for the U.S. economy, the path for inflation and for the policy rate. The boost to the U.S. labour supply from an increase in net migration is helping to offset high levels of labour demand (there are still 8.8 million job openings in the U.S.) while holding down average wage growth. The chart illustrates the magnitude of the shift in population growth estimates, which is nearly all driven by foreign-born workers. This could lead to a softer and wider landing for the U.S. economy.
Improving supply of labour should ease U.S. inflation concerns
CBO prime-age population estimates, millions
Market data
Source: CBO, J.P. Morgan Asset Management. Data reflect most recently available as of 05/04/24.
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