The unemployment rate ticked up 0.1 percentage points to 3.9%, slightly higher than the expected 3.8%. The jobs gain was 175,000, lower than the expected 240,000. The household data showed a positive trend, with full-time employment rising by 949,000 and part-time employment falling by 914,000. Wage data indicates that year-over-year wage growth has eased below 4% for the first time since June 2021, with a 3.9% annual increase in all private wages.
The reaction in bond yields is a significant de...

The ADP employment report showed an increase of 192,000 in US employment in April, above the 180,000 expected. The service sector added 145,000 jobs, and the goods sector added 47,000 jobs. The leisure and hospitality sector saw the largest addition, with 56,000 jobs added. The report also showed sticky annual pay growth, particularly for job changers, up 9.3% Yoy which is down from 10.0% YoY in Mar but still up from 7.3% YoY in Feb.
The market is fading the ADP data which showed better-than-exp...

The ECI grew 1.2% quarter-over-quarter (QoQ) and 4.2% year-over-year (YoY) in Q1 2024, exceeding expectations and matching the previous quarter's growth rate. Private wages and salaries increased 1.1% QoQ and 4.3% YoY, unchanged from the previous quarter. The growth in private wages was broad-based across occupations, with sales experiencing a notable 1.9% QoQ increase. Notably, wages and salaries of state and local governments grew 1.4% QoQ and 5.0% YoY, driven by healthcare services and public...

Today's European data indicate a continued easing of inflation across European countries.
• Spain's CPI inflation for April presented lower than anticipated figures, with a headline CPI of 3.3% YoY versus an expected 3.3%, and a MoM growth of 0.7%. Core CPI also decreased YoY from 3.3% to 2.9%.
• The German CPI inflation similarly showed subdued results with it being slightly below expectations at 0.5% MoM and 2.2% YoY, with core CPI easing from 3.3% to 3.0% YoY.
• The European Economic Sentimen...

Consumption was pretty hot, but the gain was mostly affected by energy prices rising. PCE inflation reflected the unexpected acceleration from yesterday. Yields may pull back today, but I'm not sure we'll see that turn into a sustained move.
Pricing in 1 rate hike this year feels about right. A reminder, services inflation is still sticky. PCE services (ex-energy, housing) inflation ticked up in Mar to 3.5% YoY vs 3.4% YoY in Feb and has only been accelerating this year.
Bonus doomer data: PCE (...

Fed speakers this morning walking the hawkish tightrope:
• Downplaying CRE risks
• Magnifying risks of cutting rates too soon
• Wanting to see more progress on inflation
• Bostic sees 1 cut in 2024
• Goolsbee still seeing 3 cuts in 2024
Fed's Bostic:
• I want to avoid volatility from the balance-sheet runoff.
• The Fed is aware of CRE risks but doesn't see them as broad-based.
• Cutting rates too soon could be more disruptive.
Fed's Goolsbee:
• We're in a bit of a murky period with inflation.
• ...