Today’s #JobsReport, which witnessed nearly 1.8 million #jobs gained in the month of July, was stronger than many anticipated, yet it also displayed some signs of slowdown in #labor #market improvement.
The report shows that the pace of #job-gain acceleration has now slowed markedly, and it is our best guess that the rapid rate of return to #work will now exhibit a very deliberate pace of rebound from here.
That’s particularly the case for some sectors, such as #retail and #leisure #hospitality, where the slowing in improvement was even more pronounced.
Still, the #economy as a whole can ironically do reasonably well, as it has over the past few months, highlighted by improving #manufacturing data, #consumption and #housing data, etc…
We think that the next few months could see a very reasonable rate of #economic growth, even with a slower pace of #job recovery.
Finally, despite today’s solid #JobsReport, a more sober reality in terms of hiring will begin to settle in, but that is also a reality that will keep the @federalreserve on hold in terms of interest #rates for a very long time.
The #Fed will also be increasingly willing to provide more aggressive forward guidance and additional #asset-purchases to absorb the heavier @USTreasury supply associated with greater levels of #fiscal stimulus.

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More from @RickRieder

May 4
As was widely expected, the @federalreserve’s Federal Open Market Committee raised the target range for the Federal Funds #policy rate by 50 basis points (bps), to between 0.75% and 1.0%, and announced the start of #runoff of the central bank’s balance sheet.
As previously suggested by the #Fed’s March minutes, the pace of runoff was confirmed today as $95 billion/month ($60 billion in U.S. #Treasuries and $35 billion in Agency #MBS, with a three-month phase-in period.
Also as expected, the statement reiterated that the #FOMC “anticipates that ongoing increases in the target range will be appropriate,” underscoring the seriousness of #Fed policymakers in getting #inflation and inflation expectations under control.
Read 16 tweets
May 2
While there is still considerable uncertainty over the forecast for #inflation, we think both Core #CPI and #PCE inflation peaked in March and February, respectively, and should move appreciably lower by the end of 2022. Image
Throughout the pandemic, strong disposable #income and limited services spending fueled consumer #spending on goods and high goods volumes created #bottlenecks and extreme #inflation. Image
Eventually, excessively easy #MonetaryPolicy caused this robust #inflation to broaden into less disrupted categories.
Read 6 tweets
Mar 10
A few months ago, #markets expected U.S. #inflation to peak by mid-2022 at around 7% to 8% at the headline level and then anticipated that generalized #price gains would decline into year end, closing the year around 4%.
However, the tragic war now unfolding with Russia’s attack upon Ukraine has not only sent #energy prices skyrocketing but it has led to much greater uncertainty over #economic growth and #MonetaryPolicy reaction functions, in Europe and indeed around the world.
Core #CPI (excluding volatile #food and #energy components) came in at 0.5% month-over-month and 6.4% year-over-year. Meanwhile, headline CPI data printed at 0.8% month-over-month and came in at 7.9% year-over-year, the greatest increase over a 12-month period since January 1982.
Read 17 tweets
Feb 25
As violent tragedy unfolds in Ukraine, what may appear as a relative lack of #market reaction in the U.S. belies the great uncertainty, lack of conviction and anemic #TradingLiquidity across #markets today.
Indeed, only six times in the last 10 years has top-of-book #liquidity on the #SPX been as low as it has been recently.
Additionally, we have been witnessing remarkable daily ranges in the #SPX, comparable to only a handful of major periods/events over the past dozen years.
Read 5 tweets
Feb 10
With respect to the data, #coreCPI (excluding volatile food and #energy components) came in at 0.6% month-over-month and at a high 6% year-over-year.
Meanwhile, headline #CPI data printed at a strong 0.6% month-over-month and came in at 7.5% year-over-year, the greatest increase over a 12-month period since February 1982.
Additionally, the @federalreserve’s favored measure of #inflation, #corePCE, increased 0.5% in December, bringing the year-over-year figure for the measure to 4.9%, as of that month.
Read 15 tweets
Jan 12
Today’s #inflation report continued to reinforce the theme that gaudy #price gains are not standing in the way of demand.
It is a very rare time in history, in fact, most people operating in #markets haven’t seen this sort of demand outstripping supply in the real #economy in their careers, with some areas seemingly depicting a dynamic suggesting that “price is no object.”
Clearly, #inflation has been escalating for a number of months due to #shortages of supply in areas such as #housing, #commodities, semiconductors, new and used cars, etc., and those supply shortages are mostly still in place today.
Read 12 tweets

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