How The Jobs Surge Compares to Inflation Data When it Comes to Bond Volatility

Abstract

This morning's jobs report showed payroll creation at 528k for July compared to a median forecast of 250k and a previous reading of 398k. Wages came in at 0.5 vs 0.3 f'cast and were revised up another 0.1 last month. Potent arguments against recession (or in favor of wage inflation) spell trouble for bonds. Inflation does more to push rate expectations up in the shorter term.