Forget the good news in the jobs report – record unemployment and underemployment rates – let’s focus on the weakness in wage growth (all thank to revisions)…
Revisions to average hourly earnings data paint a marginally less worrisome picture for the Fed on wages than the Nov report
The upturn in wage growth in Nov (originally reported as +0.6%) was revised (to +0.4%)
The 4.6% annual wage growth in Dec was the lowest since Aug '21 pic.twitter.com/1lCjoDjcMe
— Nick Timiraos (@NickTimiraos) January 6, 2023
And that ‘bad’ news is just what stocks wanted…
Bond yields plunged led by the short-end…
Gold also spiked, back above $1850…
And the dollar was dumped…
And most importantly, Fed rate trajectory expectations shifted dovishly lower (lower terminal rate and more rate-cuts)…
These easing financial conditions are not what The Fed wants to see.
