Salaries in Poland are increasing by 10.6%, which is a very good result considering a 4.2% inflation rate. Unfortunately, industrial production is not faring as well, falling short of expectations. Meanwhile, we take a closer look at the proceedings of the latest Federal Reserve (FED) meeting.
Continued Salary Growth
Interestingly, despite a marked slowdown in the rate of price increases in Poland, the pace of wage growth has hardly slowed down. Salaries increased by an average of 10.6% year-on-year. This means that the average Pole employed in a company employing 10 or more people now earns an average of PLN 8278.63. However, it’s worth noting that total employment in the corporate sector is simultaneously declining – by 0.4% annually. This does not necessarily mean an automatic increase in unemployment. These people may be moving to smaller, less than 10-person companies, which are not included in these statistics, starting their own businesses, or retiring. Therefore, conclusions about unemployment should wait for further data, especially as employment has been slowly declining for some time, and unemployment rates are at long-term lows.
Second Set of Data Not as Good
After the positive labor market data, information about the reading of industrial production in our country also arrived. Unfortunately, it is not growing by 7.3% as previously thought, but only by 4.9%. This is a significant change from expectations. As a result, the slight devaluation of the złoty on the markets is not surprising, despite the comfortable position of our currency in the global markets. When the dollar is retreating and capital flows to Europe, it is usually a time when the złoty strengthens. However, the weaker data led to investors pulling out of our currency anyway.
Transcripts of Conversations with FED Members
The so-called minutes, or transcripts of conversations from Federal Reserve meetings, are regularly published. The most recent publication from the July meeting was released yesterday. It turns out that the conversations themselves indicated more cuts than the subsequent statement after the meeting. This validates the scenario of a rate cut in September. Looking at the futures contracts’ prices on the interest rate, there is nothing to validate – it’s all factored into the prices. However, markets still reacted with another weakening of the dollar, suggesting that a significant portion of investors were still betting against the cuts.
Today’s macroeconomic calendar features PMI index readings.
Maciej Przygórzewski – Chief Analyst at InternetowyKantor.pl and Walutomat.pl.
Source: https://ceo.com.pl/place-w-polsce-lepsze-niz-dane-z-przemyslu-15834
