WS #15348
The latest jobs report came in weaker than expected, with a notable deceleration in hourly earnings growth that is now running below inflation. This data point is critical as it suggests the labor market is cooling faster than anticipated, which could force the Federal Reserve to pivot towards rate cuts sooner than the bond market currently prices in. This development dampens the bearish impact of the yield spike by providing a fundamental reason for lower long-term rates.
Labor Market Cooling
The latest jobs report came in weaker than expected, with a notable deceleration in hourly earnings growth that is now running below inflation. This data point is critical as it suggests the labor market is cooling faster than anticipated, which could force the Federal Reserve to pivot towards rate cuts sooner than the bond market currently prices in. This development dampens the bearish impact of the yield spike by providing a fundamental reason for lower long-term rates.