Reply To: Traders Market Weekly: Inflation, Disinflation or Deflation


Nonfarm payrolls increased by 209,000 in June (consensus 220,000) and there were downward revisions to April and May that, combined, showed 110,000 fewer jobs than originally thought. Average hourly earnings, though, increased a stronger than expected 0.4% (consensus 0.3%) and May was revised up to 0.4% (from 0.3%), so the year-over-year change in June was unchanged at 4.4%.

The key takeaway from the report is that it continued to fit in the soft landing zone, as payroll growth slowed but remained positive; meanwhile, an increase in the average workweek and the 0.4% increase in average hourly earnings are a boon for aggregate earnings that will continue to support both discretionary and non-discretionary spending.

The Treasury market had a knee-jerk reaction, but yields have returned to levels seen before the data was released.

The 2-yr note yield, at 5.01% before the data, plunged to 4.91% in the immediate aftermath but now sits at 5.00%.
The 10-yr note yield, at 4.07% shortly before 8:30 a.m. ET, fell to 4.01% but now sits at 4.07% again.