- A slew of employment data this week will help shed light on whether cracks are beginning to emerge in the labor market. Conditions remain resilient up to this point as evidenced by the low and stable claims for UI benefits (initial and continued).
- Official unemployment has gradually ticked up from its low of 3.4% in April of 2023 for a present value of 3.9%. U6 unemployment has mirrored this progression, bottoming in Dec 2022 at 6.5% and currently sitting at 7.4%.
- This was to be expected given the Fed’s mandate to bring down inflation. In the event we get a 4% print on the official rate, I’ll be looking for feedback from the FOMC conference on June 12.
- I articulated in June’s Monthly Take that the data suggests a .1% and .3% print MoM for headline and core CPI, respectively.
- Bloomberg economic forecasts currently show a .3% MoM for headline CPI. The degree to which this downside surprise will be a risk-on event depends on whether labor data impresses, disappoints, or comes in as expected.
