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Why MNI
MNI is the leading provider
of intelligence and analysis on the Global Fixed Income, Foreign Exchange and Energy markets. We use an innovative combination of real-time analysis, deep fundamental research and journalism to provide unique and actionable insights for traders and investors. Our "All signal, no noise" approach drives an intelligence service that is succinct and timely, which is highly regarded by our time constrained client base.Our Head Office is in London with offices in Chicago, Washington and Beijing, as well as an on the ground presence in other major financial centres across the world.
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- Despite all those signs of labor market tightness [see part 1], AHE took the headlines and increased the odds of a further downshift to a 25bp hike in February. Dovish market reaction at the time was amplified subsequently by the largest miss in ISM services since 2008, with the combination sparking a 25bp intraday rally in 2Y Treasury yields.
- The prior month’s strong upward revision proved to be largely a head fake, with total AHE growth revised back down from 0.55% to 0.40% in Nov and slowing to 0.275% in Dec, the softest rate since Feb and before that Mar’21.
- Further, after an even stronger recent run, non-supervisory wage growth of 0.21% M/M (following a 0.43% revised down from 0.68%) was the softest since Jan’21. Importantly, compositional issues mean that just like we couldn’t put too much weight on the prior upside, we equally can’t get too carried away with this latest downside surprise.
- A far better test is yet to come with the Employment Cost Index for Q4 on Jan 31 (day 1 of the 2-day FOMC meeting). For now though, combined with average hours worked also falling towards the lower end of the pre-payrolls range, there are some marginal signs of labor demand moderation even if job openings remain historically elevated and weekly initial jobless claims trend lower at a rapid rate.
Why MNI
MNI is the leading provider
of intelligence and analysis on the Global Fixed Income, Foreign Exchange and Energy markets. We use an innovative combination of real-time analysis, deep fundamental research and journalism to provide unique and actionable insights for traders and investors. Our "All signal, no noise" approach drives an intelligence service that is succinct and timely, which is highly regarded by our time constrained client base.Our Head Office is in London with offices in Chicago, Washington and Beijing, as well as an on the ground presence in other major financial centres across the world.
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