Salaries in Poland are rising, employment is falling

• The growth in wages in the Polish private sector accelerated in August to 11.1% year on year (market estimates were 10.8% year on year, in comparison to 10.6% year on year in July). Despite this rise, the rate of wage increase has been slowing since the start of the year (although it remains in double digits).
• Employment fell by 0.5% in August year on year (a decrease of 0.4% year on year in July). However, the labour market in Poland remains strong due to the strong domestic demand in the services sector. Polish industry performed lower in August mainly due to weak foreign demand, and production fell by 1.5% year on year (market estimates fell by 0.2%). The core Consumer Price Index (CPI) fell to 3.7% year on year.

Global currency markets

• In the USA, the Federal Reserve cut interest rates by 50 basis points, which was an unexpected move, causing the dollar to weaken.

In August, the rise in wages in the Polish private sector accelerated to 11.1% on an annual basis (compared to market forecasts of 10.8% and a rise of 10.6% in July). Although the increase remains in double digits, the pace has clearly slowed since the start of the year. Meanwhile, employment fell by 0.5% on an annual basis in August (after a decrease of 0.4% in July). Even though the number of jobs decreased by about 20,000, the Polish labour market is still in good shape, mainly thanks to strong domestic demand in the service sector.

On the other hand, the Polish industry fared worse in August, due to weak foreign demand. Production fell by 1.5% on an annual basis (compared to market forecasts of -0.2%). The core CPI in Poland slowed in August to 3.7% on an annual basis, indicating a slowdown in inflationary pressure.

On the international market, the United States Federal Reserve (Fed) unexpectedly cut the main interest rate by 50 basis points, to a range of 4.75-5.00%. According to a press release, the Fed is confident that inflation in the US will return to 2% and that the economy and labor market will find equilibrium. According to Fed Chairman Jerome Powell, recent labor market reports point to a cooling down, which prompted the bank to take preventative measures to maintain labor market stability.

The EUR/USD pair has been trading mainly in the 1.111 – 1.118 USD per euro range this week. Despite the weakening of the dollar after the Fed’s decision, no significant losses were recorded. The złoty was mainly quoted in the 4.265 – 4.285 PLN per euro range, and the USD/PLN pair fluctuated in the 3.82 – 3.86 PLN per dollar range, with the rate being slightly over 3.82 PLN/USD on Friday morning.

AKCENTA CZ a.s.