UBS are looking for stronger-than-expected jobs growth in Friday's nonfarm payroll report, due at 8.30 am US Eastern time:
More broadly UBS sees the main economic focus for the coming year as the ongoing slowdown in inflation rates, but point out that central banks can claim only a small part of the credit for bringing inflation down:
- Transitory durable goods inflation ended automatically
- Energy inflation was more of a supply issue
- Profit-led inflation is fading in the face of consumer rebellion
- Higher rates slow inflation by slowing credit and raising unemployment. These effects have been very muted so far.
UBS add that lower inflation will add to real wage growth, helping to create a "softish" economic landing.
