We have seen a big jump in the US 1Q employment cost index of 1.2% quarter-on-quarter versus 0.9% in 4Q23, well above the 1% expected and above every single individual forecast in the Bloomberg survey. Not a good look as this is the Federal Reserve's favoured measure of labour costs, and given labour costs are the biggest cost input in a service sector-led economy, such as the US, it can help to keep price pressures elevated. This reinforces the prospect of hawkish messaging from the Fed tomorrow. The details show the strength was primarily led by the government sector where wage and salary growth rose from 4.7% ... (full story)