Quits Rate Vs. Wages

During good economic times, people feel comfortable quitting a job because they believe that they can soon find another job. On the flip side, when there are layoffs during economic downturns, few are bold enough to risk jumping ship.

Furthermore, “the quits rate tends to be a leading indicator of wage growth,” as Deutsche Bank economist Joseph LaVorgna points out. “As the chart below illustrates, the quits rate historically leads the change in average hourly earnings of production and non-supervisory workers by three quarters.”

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Cross-Asset Correlation Vs. Gold

Cross-asset correlation between stocks, credit, foreign exchange, interest rates, and commodities can give an indication on where the gold price is headed to. When there is a financial crisis, the volatility goes higher and as a consequence, the level of cross-asset correlation goes higher. During this crisis period, investors tend to use index products which adds to the level of correlation. Particularly high are indicators of the macro environment such as rate-equity, oil-equity, and Euro-equity correlations.

What’s interesting is that gold is correlated to the level of cross-asset correlation.