Macro and Politics
Tacirler Investment
* September Employment figures will be released at 10:00 local time. The seasonally adjusted unemployment rate declined from 8.1% to 7.8% in August, while the youth unemployment rate for the 15–24 age group fell by 1.1pp to 13%. The broad underutilization rate — a more comprehensive gauge of labor market conditions — moved in the opposite direction, rising from 30.6% to 31% despite the improvement in headline unemployment. A breakdown of the subcomponents shows that the combined rate of time-related underemployment and unemployment declined from 20.8% to 20.2%, while the combined rate of unemployment and potential labor force increased from 19.5% to 20.2%. The August data point to a partial recovery in headline labor market indicators following the marked deterioration in July, while painting a more cautious picture of underlying labor market conditions. Although the increase in employment and the decline in youth unemployment are encouraging, the rise in the broad underutilization rate to 31% suggests that labor market slack remains considerably greater than implied by the headline unemployment rate. Accordingly, we would refrain from interpreting the decline in headline unemployment as evidence of a strong and broad-based improvement, while continuing to assess overall labor market conditions as relatively tight despite the elevated degree of underutilization.