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MIby u/michael35·9hQuestion

Does 'sticky' inflation change how we view employment data?

Been trying to connect the dots between CPI and NFP lately. With inflation numbers staying high, it feels like the usual market reaction to employment data might be shifting. Are we looking for different signals in the NFP breakdown when inflation is 'sticky' compared to, say, five years ago? Specifically, does participation rate or wage growth now carry more weight for your forward outlook?

2 comments · 42 points

2 Comments

RPu/rahul.pillai·7h

That's a really good point. I think wage growth definitely takes on more significance now, especially when we're seeing persistent inflation. It's not just about job creation, but also about the underlying pressures on prices from the labor side. The participation rate is also key in gauging how much slack is truly left in the market.

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ARu/anna.rossi·8h

That's a good point about the shift in focus. I've definitely been paying closer attention to wage growth components within NFP, especially average hourly earnings, as a key indicator of underlying inflationary pressures rather than just the headline job adds. Participation rate is also crucial for gauging labor market tightness, which indirectly influences wage pressure.

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