Labor Markets

Today’s data update takes a closer look at the manufacturing data within the most recent Employment Situation release.

The further slowing we were worried about last month, particularly in the prime-age employment rate, did not materialize. This sets back expectations for earlier and more rate cuts this year, but it’s certainly a good report for anyone concerned about the left tail of labor market risk.

If there’s one takeaway from this meeting, it’s that the Committee wants to position themselves much more cautiously on the inflation outlook, but the Fed is just a couple of bad labor market prints from having to put more cuts back on the table.

The labor market is treading water at this point. It’s not drowning, but it’s unclear how long it can remain in this state.