United States Average Hourly Earnings YoYThe gap between business survey data and household survey data widened, and household survey data unexpectedly showed the biggest decline since April 22, reducing 310,000 jobs. And the weekly working hours also declined from last month.
These factors help to reduce the worry about wage inflation.
As we mentioned before, enterprise survey and household survey have their own advantages and disadvantages, and the difference is mainly because:
A. From the sample size,The sample size of enterprise survey is much larger than that of household survey. This makes the former statistically less error, so it is intuitively more reliable.B. From the perspective of survey scope, the household survey covers a wider range because it interviews individuals in different families, not limited to groups employed by enterprises and institutions. For example, the survey includes unincorporated self-employed persons, unpaid domestic workers, agricultural workers and private domestic workers that cannot be covered by the enterprise survey.C. Household surveys do not double-count the employment of individuals because they are interviewed, but There may be double counting in enterprise survey For example, one person works in multiple jobs.![]()
Does this employment data support the Fed to continue its rate hike, or does it support US stocks to move to new highs?The Federal Reserve will hold a meeting on interest rates in June, but officials in rate hike are still divided. One view is that the current data is not enough to support stopping the rate hike and supporting the further tightening of monetary policy. Those who hold this view include Dallas Fed Chairman Logan, Atlanta Fed Chairman Bostic, St. Louis Fed Chairman Brad and other officials. Another view tends to suspend the rate hike to wait for more economic data to be released. Those who hold this view include Federal Reserve Chairman Powell, Vice Chairman Jefferson, Philadelphia Fed Chairman Haka, Chicago Fed Chairman Goolsby and others.
So the problem now is that if you look at the non-agricultural employment data, you obviously support the rate hike in June; If you look at the changes in unemployment rate and wage growth rate, you can also suspend it for one month and consider it in July. In this way, whether there may be a rate hike in June or not, the vote of Fed officials may be very divided.
However, US stocks didn't take rate hike seriously at all.
The US stock market led by the Nasdaq index has broken through one after another. At the same time, it measures the volatility of the S&P 500 S&P 500 Volatility Index (VIX) It has also fallen back to 14.6, the lowest since the outbreak on February 14, 2020. Investors' pricing of downside risk protection is extreme, as if there is no downside risk.