Bond markets are selling off again following the first handful of labor market data points of the year.
Private payrolls rose 164,000 last month, in the face of consensus calls for only a 125,000 increase. In addition, U.S. initial jobless claims fell to 202,000, an 18,000 drop from the week prior and below median calls of 216,000.
For their part, the December FOMC minutes noted that it may be appropriate to hold monetary policy restrictive “for some time” but acknowledged that “participants view the policy rate as likely at or near its peak for this tightening cycle”. Still, there was no clear indication that policymakers would begin easing financial conditions in 1Q2024, as the futures markets suggest.
Coupled with the labor market data this morning, traders pulled back their calls for rate cuts marginally. Fed Funds futures are now pricing in less than 140 basis points (bps) of cuts over 2024, approximately 10-15 bps lower than earlier this week. U.S. non-farm payrolls and wage data will be released tomorrow and serve as another guidepost for market participants.
Michael Oravetz
Senior Director, Investment Management Group
| Date | Event | Survey | Actual | Prior | Revised |
| 1/4/2024 | Challenger Job Cuts YoY | — | -20.20% | -40.80% | — |
| 1/4/2024 | ADP Employment Change | 125k | 164k | 103k | 101k |
| 1/4/2024 | Initial Jobless Claims | 216k | 202k | 218k | 220k |
| 1/4/2024 | Continuing Claims | 1881k | 1855k | 1875k | 1886k |
| 1/4/2024 | S&P Global US Services PMI | 51.3 | 51.4 | 51.3 | — |
| 1/4/2024 | S&P Global US Composite PMI | — | 50.9 | 51 | — |
| 1/5/2024 | Revisions: Household Survey Data | ||||
| 1/5/2024 | Two-Month Payroll Net Revision | — | — | -35k | — |
| 1/5/2024 | Change in Nonfarm Payrolls | 174k | — | 199k | — |
| 1/5/2024 | Change in Private Payrolls | 130k | — | 150k | — |
| 1/5/2024 | Change in Manufact. Payrolls | 5k | — | 28k | — |
| 1/5/2024 | Unemployment Rate | 3.80% | — | 3.70% | — |
| 1/5/2024 | Average Hourly Earnings MoM | 0.30% | — | 0.40% | — |
| 1/5/2024 | Average Hourly Earnings YoY | 3.90% | — | 4.00% | — |
| 1/5/2024 | Average Weekly Hours All Employees | 34.4 | — | 34.4 | — |
| 1/5/2024 | Labor Force Participation Rate | 62.80% | — | 62.80% | — |
| 1/5/2024 | Underemployment Rate | — | — | 7.00% | — |
| 1/5/2024 | Factory Orders | 2.30% | — | -3.60% | — |
| 1/5/2024 | Factory Orders Ex Trans | — | — | -1.20% | — |
| 1/5/2024 | Durable Goods Orders | 5.40% | — | 5.40% | — |
| 1/5/2024 | Durables Ex Transportation | 0.50% | — | 0.50% | — |
| 1/5/2024 | Cap Goods Orders Nondef Ex Air | — | — | 0.80% | — |
| 1/5/2024 | Cap Goods Ship Nondef Ex Air | — | — | -0.10% | — |
| 1/5/2024 | ISM Services Index | 52.5 | — | 52.7 | — |
| 1/5/2024 | ISM Services Prices Paid | — | — | 58.3 | — |
| 1/5/2024 | ISM Services Employment | — | — | 50.7 | — |
| 1/5/2024 | ISM Services New Orders | — | — | 55.5 | — |
