The March employment report came in well below expectations at 110,000. Along with this was a drop in the unemployment rate (from 5.4% to 5.2%) and hourly wage gains of 0.3 percent (as expected). So much for my expectation (under the consensus of 250,000) of 200,000! The payroll employment figure was almost equal to the standard error (remember yesterday's lecture) of 100,000.
Just after this was announced, the 10-year bond yield dropped from 4.50% to 4.41%, and the dollar fell. Remember, that the gap-up support for the 10-year is right around the value NOW.
With this report, the view is that the Fed will not be more aggressive in raising rates as had been feared. The "measured" pace can be sustained,and the likelihood of 50 basis point rises is dead -- for now.
As I am writing this, Larry Kudlow is already making apologies for the number and saying all is well, don't worry, the number is not statistically significant.
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