Reply To: Traders Market Weekly: It’s a Mad World of Bond Auctions and Central Bankers


Nonfarm business sector labor productivity increased 4.7% in the third quarter (consensus 3.6%) following an upwardly revised 3.6% increase (from 3.5%) in the second quarter.

Unit labor costs decreased 0.8% (consensus) following an upwardly revised 3.2% increase (from 2.2%) in the second quarter. That was the highest rate of productivity since the third quarter of 2020.

The key takeaway from the report, other than the impressive uptick in productivity, is the decline in unit labor costs. It is a particularly timely piece of data, as it plays perfectly into the market’s swelling expectation that moderating inflation pressures will keep the Fed from raising rates again.

Initial jobless claims for the week ending October 28 increased by 5,000 to 217,000 (consensus 214,000). Continuing jobless claims for the week ending October 21 increased by 35,000 to 1.818 million.

The key takeaway from the report is much the same, which is to say the low level of initial claims isn’t consistent with a material weakening in the labor market.

Treasury yields turned lower in response to the data.

The 10-yr note yield was at 4.69% just before 8:30 ET and sits at 4.62% now, which is 17 basis points lower than yesterday.
The 2-yr note yield was at 4.95% shortly before 8:30 ET and sits at 4.92% now, which is five basis points lower than yesterday’s settlement.