This morning's job numbers did not disappoint!
531k new jobs, 80k above expectations, with the two previous months revised by an additional 235k.
The unemployment rate came in at 4.6% (down .2%), while the participation rate, however, concerningly remained unchanged 61.6%.
The manufacturing space added 60k. Construction another 44k. Leisure and hospitality up 164k. Professional business services added 100k.
Wages overall rose by 4.6% annually.
Economist Peter Boockvar, in frank fashion, summed it up with a jab at the Fed that yours truly happens to sympathize with in his morning note:
"Bottom line, the number of unemployed is down to 7.4mm which compares to more than 10mm job openings as of September. After losing 22.3mm jobs last March and April, the economy has added back 18.2mm jobs. This, combined with wages now rising more than 5% on an annualized basis over the past 6 months on top of inflation just about everywhere makes the Federal Reserve look even more out of touch with policy relative to reality. Again, their idea right now of tightening is to take their balance sheet higher by another $500b about over the next 8 months and still have rates at zero."
Well, forgive my cynical tone, but that (that the fed will consequentially move the needle based on employment trends) is simply not my take.
You see, the consequentiality of the Fed consequentially moving the needle would express itself immediately and dramatically in the equity market (in a not good way for the bulls). And that my friends is simply not an option for this Fed.
I.e., suffice to say that, in my humble view, this utterly stock market-centric Fed is in no way interested in the porridge (data) showing up in any way hot. They need it Goldilocks to the point that they'll tell us (their "forward guidance" tool) that the temperature's plenty cool, even while they're burning their tongues...
Why? Well, have a look at our chart of U.S. household net worth:
"...investors (and anyone interested in forecasting politics) should focus on material constraints, not policymaker preferences."
--Papic, Marko. Geopolitical Alpha
Have a great day!