No 686 - New value judgements

磐石金融有限公司（BANDSFinancial Limited ）在香港注册成立，是一家持有香港证监会（SFC）2号牌照的期货经纪公司，业务涉及中国以外全球大部分活跃期货及期权市场。　　The tone of Sunday‘s announcements seems to point to the Covid outbreak in Guangzhou as more serious than first thought. As of Saturday Guangzhou city has tested 16 million people, finding 33 cases of infection. Guangzhou has reported 94 cases in total as of Sunday, but the feeling is still uneasy. Travel restrictions that were introduced on 30th May have been tightened. To leave the province residents should provide a negative virus test conducted in the previous 48 hours, narrowing the requirement from the previous 72 hours.Recent bank analysis is dominated by reviews of Friday nights non-farm employment data which came in disappointingly less than expected. It would seem upbeat PMI’s are not reflected in the US employment numbers. However, if we look at the underlying unadjusted data in March, non-farm payrolls were 143,315,000, in April they rose to 144,412,000 and in May they rose again to 145,345,000. Looking at the differential, that means in April, payrolls rose by +1,097,000, and in May they rose by +933,000. The reality is that some 2m US jobs have been created before being smoothed by the seasonal adjustment process, leading to a discussion of how relevant or accurate the smoothing process is at this point in the US recovery.However, for inflationistas the real interest is in the wage growth which now stands at +2.4% YoY with many industries currently looking at +3.5%. Bank pundits suggest wage growth could go to 3.5-4% but should be limited as “there is still considerable slack in the labour market.” However, perhaps the 600k covid deaths in the US has led the workforce to re-evaluate what its goals are in life. In the same way, people seem to be asking themselves if they want to return to the office full time, seemingly stepping off the fast-moving conveyor belt from birth to death may be attractive to many millennials no matter what the financial implications. Therefore the US labour market may be tighter than the economists are aware as they misjudge the pre covid and post covid appetite to join the workforce, however, we will only know in hindsight.Although not touched by the soul searching created by the pandemic to the same extent several western news sources have picked up on an idea floating on the Chinese internet of a way of life that includes not getting married, not having children, not buying a house, not working extra hours and creating a low-effort, low-cost lifestyle that might consist of working just a few months a year. Feeling that the doors to upward mobility are closed, Chinese youth are discussing a rejection of the 996 lifestyle that dominates adulthood where employees are expected to work from 9 a.m. to 9 p.m., six days a week. Both in the US and China, the workforce may be making value judgements that defy quantification by economists. These new value judgments may explain a sign recently seen by my daughter who lives in New York in the shop window of her local Pret a Manger, “Sorry, we are closed today as nobody came into work”Have a good day　　Joh