Today's Un-enjoyment figures posted under an old rule of thumb I used to promulgate back in the dark ages on CNBC. Simply stated, The most accurate employment data set occurs when an outside "miss" (up or down) carries 2 month's revisions in the SAME direction of the print. Such as the case today.

The labor pool is showing some elasticity but I can certainly attest to the dearth of skilled labor here in CA. The wage component is annualizing around the 5 year T rate.(see below - but GDP prints of 5 are possible in our calculations) Businesses have moved quickly to support the fiscal stimulus the Administration has tossed on the already vibrant up cycle.

My post-mortem  of the release is a reminder that our market based neutral model had been leaning in this direction since early Q4 2017. Presently, with a 12 month money set of 2.53, (le cinco es 2.66 !) and the other strong stim, our calibrated neutral rate for FF in the policy corridor is around 2% and .75bps from the lower floor. Policy today is dialed up near 11 a full eight years into the economic advance as  Old World and New Frontier economies brighten.

We will be shifting our focus to the potential "whip-snap" effect in the term structure as J.C. Lately and the Powell Fed Flap-jawers have finally bought into what Mr. Money Market has been screaming for months. The unintended consequences and unknown unknowns of Op Twist and moving rates before balance sheets could take shape as Q2 bleeds into 3. (this has always been our gripe with bandwidth filled with equity pundits hyperventilating over today's price action - money is a good 6 months ahead of them) Eurodollars for the end of 2019, and those of the Green persuasion will have our attention into and well out of St Patrick's Day.


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