00:00Is this something you can ignore, or is there some information that's worth paying attention to?
00:05Yeah, I think the headline is a bit confusing because you've got the drop in the unemployment
00:09rate on a very weak headline and a weak revisions. I'd be hesitant to just write this report off
00:16because I think that the revisions in the headline number are pointing to weakness,
00:19while the drop in the unemployment rate is really about the supply side and the drop in the
00:24participation rate. So I think you can have those two things happening at the same time,
00:27and that's how you square the message there. And I wouldn't completely ignore it. And the markets
00:32are not completely ignoring it because you're seeing a big hike probability come out with the
00:37front end rallying here. And I think that makes a lot of sense. Yeah, it was more than 50%
00:41chance
00:41that there was going to be a September rate hike. And I'm looking at less than a 40% chance
00:45currently being baked into Fed funds futures. Jeff, what's your understanding of what the tell
00:50is here for inflation? How much does it matter to have inflation coming from wages versus the supply
00:55side when it comes to whether the Fed will hike and how they view the state of the economy?
01:01Yeah, well, you know, it's both. And we've had a serial set of supply side shocks since COVID.
01:08And that's really been what's been holding up inflation. But the labor market is relevant as
01:14well. And so the wages picture here is a little bit positive. I think that's contributing. Let me be
01:19more clear here. So you've had a little bit disappointment in terms of the wage figure in the payroll report
01:24today. That features into longer run services inflation. And that's helpful with regards to
01:31the expectation on the inflation front. And as you know, you were talking about in the earlier segment
01:35with Stephanie, you know, it's really the inflation reports and the inflation picture that's in the
01:39driver's seat for the FOMC. But the read through from the payroll report from the wages is helpful
01:45with regards to seeing some easing there. And I think that's the kind of takeaway into next week.
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