Dueling reports gave very different pictures of the US labor market, but the Fed’s focus is still on easing inflation.
Jonathan Levin is a columnist focused on US markets and economics. Previously, he worked as a Bloomberg journalist in the US, Brazil and Mexico. He is a CFA charterholder.
Conflicting signals.
Photographer: Michael Nagle/Bloomberg
Dueling economic reports whiplashed bond markets on Friday — for all the wrong reasons.
At 8:30 a.m. in New York, a hotter-than-expected US payrolls report sent yields on Treasury notes significantly higher, as traders bet that labor market strength would delay interest rate cuts from the Federal Reserve. About ninety minutes later, another report from the Institute for Supply Management seemed to send the opposite signal — that employment activity in the US service sector was contracting — and yields plunged. The series of events was a perfect encapsulation of two key lessons from the post-pandemic economy:
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