The week arguably offered some clarity on key facets of today's murky financial, economic and policy backdrops. At this point, the U.S. economy is anything but falling off a cliff. A stronger-than-expected 390,000 jobs were added during May (April’s revised slightly higher to 436k). The unemployment rate was unchanged at a multi-decade low 3.6%. Wednesday’s JOLTS data registered a larger-than-expected 11.4 million available jobs in April, down from March’s (revised higher) record 11.855 million. At 200,000, weekly unemployment claims remain exceptionally low from a historical perspective.
Some pointed to the 0.3% monthly gain (5.2% y-o-y) in Average Hourly Earnings as indicating waning wage growth momentum. Unprecedented labor market tightness will keep pressure on companies to continue to boost pay to attract and retain workers. And there is little reason to believe Wage/Price Spiral Dynamics will offer Fed officials much breathing room anytime soon. There are segments of the economy that will be absolutely booming this summer.
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