After an exuberant Q1, which prompted extrapolators to confirm this is the big turnaround, escape velocity looms, and supposedly tight labor markets are finally doing what ‘Phillips’ said they should… Q2 has dashed economists’ hopes of nirvana with the Employment Cost Index slumping to just 0.5% growth QoQ in Q2 – the weakest since Q2 2015.
Today’s Q2 print came out at 0.5%, lower than the market consensus of 0.6% – this is a bigger drop from the 0.8% in Q1.
This does not suggest an environment in which The Fed should be ‘normalizing rates’ and it appears the dollar index agrees…
via http://ift.tt/2vPHShy Tyler Durden