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A brief review of the non-farm payroll data.
This non-farm payroll data was indeed shocking, with the exception of the employment figure surpassing expectations at over 500K. The previous non-farm payroll figures were revised upwards. Although there were one-off impacts from floods and strikes, it is undeniable that the stronger-than-expected employment demand reflects robust economic demand within the U.S. For those in the recession camp, this requires a reevaluation.
For proponents of a soft landing, the additional 500K jobs surpassed the critical threshold they had in mind. This number no longer resembles a soft landing but rather suggests an overheating economy.
The only silver lining is the modest month-over-month increase in average wages by +0.3% MoM, which has yet to show a rebound. However, given the current employment situation, market expectations for a smooth decline in service sector inflation appear pessimistic.
As I mentioned earlier, what might alter the prevailing optimism is a CPI and ECI that exceed expectations. The current non-farm payroll data could continue to support this argument. Institutional investors also need to reassess. Markets usually look ahead, but this time, the data seems to have moved backward.
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A brief review of the non-farm payroll data.
This non-farm payroll data was indeed shocking, with the exception of the employment figure surpassing expectations at over 500K. The previous non-farm payroll figures were revised upwards. Although there were one-off impacts from floods and strikes, it is undeniable that the stronger-than-expected employment demand reflects robust economic demand within the U.S. For those in the recession camp, this requires a reevaluation.
For proponents of a soft landing, the additional 500K jobs surpassed the critical threshold they had in mind. This number no longer resembles a soft landing but rather suggests an overheating economy.
The only silver lining is the modest month-over-month increase in average wages by +0.3% MoM, which has yet to show a rebound. However, given the current employment situation, market expectations for a smooth decline in service sector inflation appear pessimistic.
As I mentioned earlier, what might alter the prevailing optimism is a CPI and ECI that exceed expectations. The current non-farm payroll data could continue to support this argument. Institutional investors also need to reassess. Markets usually look ahead, but this time, the data seems to have moved backward.
$E-mini NASDAQ 100 Futures (JUN6) (NQmain.US)$ $E-mini S&P 500 Futures (JUN6) (ESmain.US)$ $E-mini Dow Futures (JUN6) (YMmain.US)$ $E-mini Russell 2000 Index Futures (JUN6) (RTYmain.US)$ $10-Year T-Note Futures (JUN6) (ZNmain.US)$ $Gold Futures (JUN6) (GCmain.US)$ $Crude Oil Futures (JUL6) (CLmain.US)$ $VIX Index Futures (JUN6) (VXmain.US)$ $ProShares UltraPro QQQ ETF (TQQQ.US)$ $Apple (AAPL.US)$ $Tesla (TSLA.US)$
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