Wages

With all of the softening in the labor market, it’s time for the Fed to actively discuss starting the process of rate normalization.

If the next month delivers either another round of soft inflation data, or a weak jobs report, the FOMC should be prepared to deliver a cut in July. If they continue to delay beginning rate cuts to gain certainty, they should consider a 50 bps cut for their first cut.

The totality of the evidence points more towards a cooling (but still good!) labor market than heating up, despite the payroll prints.

The data is consistent with those hoping for a soft landing—and soft landing cuts.

This is overall a good jobs report. Job growth is solid, and there are no obvious signs of weakness.

After what appeared to be (on the surface and at first glance) a hot January, the labor market data for February 2024 signaled a return to the narrative we followed throughout last year: the labor market is slowing, but remains strong.

In December, the labor market risks shifted further over towards unemployment.

After a somewhat worrying October report, November’s labor market data shows lower recession risk.