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    US employment growth to pick up again – Danske Bank Sandeep Kanihama

    Research Team at Danske Bank, expects the US employment growth to pick up again although it will remain lower than in 2014 and 2015 as we are very close to full employment.Key Quotes“We expect employment to rise around 175,000 per month in the coming years, which means we expect a pick-up in productivity growth to ensure growth around 2.0-2.5%. Employment growth of around 175,000 per month is enough to ensure that the unemployment rate will continue to decline as we do not expect to see a major pick-up in participation rates. We expect the unemployment rate to reach 4.4% by year-end next year.The tighter labour market has already led to higher wage inflation although it continues to stay relatively moderate. As we expect the labour market to tighten further, we also expect increasing wage pressure, which should help push core inflation further up. We expect PCE core inflation to crawl slowly to 1.9% y/y over the forecast horizon. We also expect headline inflation to move up as the base effects from the oil price drop begin to fall out and as we expect food prices to rise at a higher pace.”


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