US macro

Friday’s labour market data had something for everyone.

At the headline level, NFP’s were strong, well ahead of consensus, and at the upper end of cycle norms.

At face value, the labour force participation rate would suggest that there are further workers left to plumb, in the overall pool of labour, and the slowing wages data likewise suggests that fears of a wage-price inflation spiral are largely unfounded.

The above plots annual wages growth, and the monthly data shown below on the left likewise matches this moderation from the peak.

Annualising 30bps leads to a much lower annual print than the 5.1% year on year number.

The message to the Fed might suggest a slightly more dovish stance is warranted. However, before writing another treatise on inflation we’ll see what this weeks’ CPI print heralds.

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