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Market Wrong Foots Data From U S Regarding Jobs

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WASHINGTON (AFX) -- The bond market cheered the seemingly weak nonfarm payroll numbers on Friday, but the details of the report showed a strong labor market and the potential for more inflation.
The market reacted positively to the Labor Department's report Friday morning that 138,000 jobs were added in April. A weaker economy could signal the end of Federal Reserve rate hikes.
With downward revisions to the two previous months, total employment was about 100,000 below expectations, giving the market hope that the Fed would see the report as confirmation of its forecast that the economy is slowing to a more sustainable growth pace.
Because, if the economy is slowing, then the Federal Open Market Committee can stop raising overnight interest rates.
It's a comforting story for traders to snuggle up with over the weekend after a bruising week of Fed-watching.
But, as usual, the story is a bit more complicated than the Goldilocks fairy tale that "everything is just right." As usual, the report was a mixed bag. Maybe more like Little Red Riding Hood, or Chicken Little.
"While the headline payroll increase was below expectations, there is nothing about this report that can be described as weak," said John Ryding, chief U.S. economist for Bear Stearns.

Looks like some wishful thinking regarding the IR surge?

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The average increase in earnings was the key figure today.

IF people are able to demand more in wages and there is enough shortage in the labour market for the workforce to get them then this will eventually lead to inflation, which we all know would make the FOMC consider continuing to raise IR's.

I'm looking for 5.5% this year.


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This past week has indicated that the US economy is going from strength to strength with every indicator pointing toward inflationary pressure building--including the all important salaries data. The overall housing market is okay and will flatten or dip maybe 20% but so what? Only the Coasts will see a real correction and Al Greenspan anticipated the froth a couple of years ago.

5.75% by year end.

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  • 301 Brexit, House prices and Summer 2020

    1. 1. Including the effects Brexit, where do you think average UK house prices will be relative to now in June 2020?

      • down 5% +
      • down 2.5%
      • Even
      • up 2.5%
      • up 5%

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