• The peak is nigh. The peak in the US labor market that is according to the bond market. In yesterday’s Comment we explained the meaning of the shape of the yield curve (not the meaning of life, a question that we can’t answer – sorry!): the cycle has reached its final full employment stage, and historically the next phase has always been a recession. The Fed either extends the cycle by easing sooner than later. That, the Fed dithers, moves too late with the economy sliding into a recession. Having said that, let’s have a look at today’s key labor market metrics for March.
  • Bloomberg consensus expects a solid 180k gain headline payrolls. That would of course be consistent with above potential GDP growth and further declines in the unemployment rate. And about that weak February reading, stuff happens, including a weak month for payrolls growth every now and then. It’s too soon to conclude that trend payrolls growth is sliding below its 200k or so trend pace. For the full report, click HERE