The headline jobs numbers were disappointing on the surface (+29K actual vs +90K expected). But one month's worth of data is not enough to know what the underlying trend is—jobs are notoriously volatile from month to month. I prefer to look at the 6- and 12-month growth rates of private sector jobs; those are the ones that matter. Government jobs have been stagnant for the past six months, and are down 1% over the past year. Flat to down government jobs are actually something to cheer about.
Chart #1
However, the rate of improvement is still quite modest, and hardly enough to warrant or justify another Fed rate hike at the next FOMC meeting in late October.
4 comments:
Jobs are a lagging indicator. Short-term money flows are down. The flight to liquidity is over.
Retail Money Market Funds (WRMFNS) | FRED | St. Louis Fed
Retail MMMFs peak at the beginning of a recession. Interest rates should come down.
Do you think TIPS are now cheap? https://scottgrannis.blogspot.com/2012/03/tips-update-not-very-attractive.html
In my view, 5- and 10-yr TIPS are the key indicators of real yields. By either measure, real yields haven't been this high for almost 25 years. I think that represents "real" value. We're talking about government-guaranteed, default-free, inflation-adjusted returns of 2.6 to 2.9%. Tough to beat!
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