Had a heavy post for today planned …. about a pretty complicated event occurring in the Capital Markets…just moved it to Wednesday with a bit of travels this week and continued Capital Market movement from a Friday Economic report… wanted to move the later to the front today as it is a bit simpler, but super important as well…
Hang on, both posts this week a bit heavy, but will keep today’s short!
Hot Jobs Numbers Puts Pressure on FED, Rates (short end) and Capital Markets
When GOOD news is bad … it happens in this part of the cycle!
On Friday February 3, 2023 the BLS (Bureau of Labor Statistics) released the “Employment Report” for January 2023…. all about expectations versus actual….
Anyone extrapolating that downward sloping chart – Far Right below. would have certainly NOT EXPECTED that huge January 23 bar… anyone would include all of Wall Street and the FOMC – (Very lagging reading, likely revised, BUT much different from expectations)
New Jobs Expected 190k ACTUAL 571K — Ya ya will be revised, but for now is what Wall Street has…
The good news is from this report lots of jobs and more than expected…. Bad News… Fed may continue to be aggressive in slowing the economy… aka Higher short term rates…
Big move in the 2 Year Treasury, one of the most in sync with Fed rate moves…
Ok… all caught up from last week…be sure to have your coffee before reading Wednesday’s post!
John A. Kvale CFA, CFP
Founder of J.K. Financial, Inc.
A Dallas Texas based fee only
Financial Planning Total Wealth
Management firm.
Hot Jobs Report Puts Fire Under FOMC … Markets Take Notice
Last Friday, January 4, 2022 the BLS (Bureau of Labor Statistics) released the most recent Employment report for January.
With the report actually quadrupling employment hire expectations and large revisions upward to several prior reports, the FOMC (Federal Open Market Committee) is all but forced to begin raising rates soon!
BREAK IN – Interesting Weekend Research Findings – In two different areas of the financial world, this last weekend of researching this post a reminder that HUGE population adjustments occurred in this report. Here is an accidental finding from the St Louis research site showing the effects of the revisions in 2021…
From the report:
Hot Report Puts FOMC on Go For Raising Rates
This HOT report, of 467k gains in employment, with expectations less than half of this number surprised market participants and the FOMC (Federal Open Market Committee) too, most certainly.
Adds in employment continue to help the Unemployment rate, once again giving the FOMC a green light of urgency to raise interest rates.
Market participant digestion of the rate raises will be interesting. Recall just a month or so ago, FOMC officials saw only one raise in 2022.
Also, recall our review of a large conference on March 24 of 2021 — yes 2021 almost one year ago…
Views: Number One From the Conference – Go Away FOMC – You Have Stayed Too Long
View number one and shared by every market related expert, the federal reserve is overstaying their welcome and should immediately stop asset purchases and begin talking about increasing rates. The main reason for these shared views are because asset levels have become inflated across almost all assets according to the experts and be continued purchases are no longer necessary given that capital markets are orderly.
Has the FOMC waited too long?
Next up, interest rates front run the FOMC!
Have a Great “Hot Unemployment Report Review” Day!
John A. Kvale CFA, CFP
Share this:
Like this:
Leave a comment
Posted in Economy, FOMC, Interest Rates, Investing/Financial Planning, Market Comments
Tagged BLS, Employment report, FOMC, Interest Rates, Unemployment Report