USA: Rising real interest rates, tighter credit conditions and weak productivity are weighing on companies. Eurozone: Energy prices rise due to lower supply, but starting position for winter remains positive. China: Despite the economy stabilising in August, the recovery in China falls short of expectations.
Chart of the month
In the US, a gap between wage costs and labour productivity has opened since mid-2021. Between early 2017 and mid-2021, wage costs for US companies increased by 2.7% per year, offset by almost equally high productivity growth. From mid-2021, however, wage costs took off and grew by 4.8% per year up to mid-2023, while labour productivity actually declined. In an initial phase, companies were able to pass on the higher costs to consumers, which fuelled inflation. This has now become more difficult, and the higher wage costs are putting pressure on companies’ operating margins.