it begun to slow down and have the effect of those increases kind of made themselves known in the market. we saw the payroll numbers as well seemingly offering some sort of data point but interestingly enough across the pond if one takes a look at europe, a banking crisis for looking at the likes of deutsche bank fallen around 8% or 9% and on the back of their credit default swap which is kind of an insurance for bond holders which has continued to be very, very expensive for deutsche bank, hindering the business quite a lot. we certainly are in the throes of what seems like a difficult time for banks, ha this leads to will be interesting and perhaps that is into the market. there s a lot going on. one of them, policymakers around the world are trying to tame high inflation despite those concerns you just mentioned over the banking system.
pay most attention to determining the next move? so data dependency, that has been the key message. and i think now more than anytime over the last year, that that will be important. so what they will be watching is of course all of the inflation numbers. but specifically they are really looking at the labor market, they will want to see what is happening with wage pressures. so the jobs report tomorrow, they will look at the payroll numbers, but particularly we ll be watching average hourly earnings because that will give us a clear indication of whether the pressures are coming down even as the labor market stays tight. and the importance of that, if they are able to bring town wage pressures fairly well, once the labor market stays strong, they could potentially achieve the soft landing that they have been aiming for. but unlikely because history tells us that that is very rare, but certainly it is a possibility. we saw also 11 million job openings, almost two jobs for every one
we were very much focused on the nonfarm payroll numbers. also a lot of focus on the very strong wage numbers as well. all of this led the investment community to reassess the expectation that fed may have to slow down with the rate hikes. not a good thing for stock markets if they press on with the interest rate hikes. as for today, the focus is shifting to ism services dwrat that comes out later today. later on the week, we ll be watching out for initial jobless claims and consumer confidence numbers. again, i think the big focus for the investment community is going to be on that next fed meeting in a week s time. john? so a lot of news right now about oil. opec and theal highs including russia are not changing their targets for shipping oil to the global economy amid new western sanctions against the kremlin. we also have a new enforcement here, the u.s. and europe, about price caps for russian oil. so what is this going to mean
available for every person looking for work. what is your lead on that? why is it so hard to fill these jobs? labor demand is remarkably strong. if you look at the payroll numbers that we ve been talking about, 372,000 last month. that s a pace of 375,000 for the past three months on average. here at cea, we like to average out the bips and bops in the monthly data. if you add on top of that over 11 million vacancies, what you quickly understand is that labor demand is really quite high. and look, the basic economics of this are important and interesting. labor demand is derived demand. it s demand that comes from people wanting more services, wanting more goods, wanting restaurants, wanting exercise bikes, wanting vacations. and one of the reasons that we have a consumer sector that s been as strong as it is dates right back to the rescue plan, the american rescue plan. by getting shots in arms and checks in pockets back when this
has broken down so many of the supply chains and globalization links that used to work pretty seamlessly. but the other issue is also about labor to go back to what the president will be talking about. it will be worth remembering two more things. firstly, what the payroll numbers today showed us is that there are still 5 million less jobs out there in the american economy than there were before the pandemic. but secondly, it also showed us that wages are going up. and it is not just at the top end of the scale, it is primarily at the bottom end of the scale where you are seeing things like the amazon effect, the fact that they have now introduced driving up wages across the economy in the lower paid jobs. and that combined with all the supply chain bottlenecks make the picture of the economy very hard for policy makes to manage and frankly the president has his work cut out trying to decide what kind of message to sell to the american people because you have many people who have actua