October 10th 2023 Weekly Economic Update

We saw another week of choppy markets last week as payrolls came in a bit hotter than desired (see more about this in the section below) but the reality is, headline job growth was concentrated in restaurants, hotels, and government employment, mostly in sectors paying lower wages. Yields on the 10-year spiked over 10 basis points on the news yet stayed below Wednesday’s intraday high. Odds of a rate hike in November rose after the latest jobs report, now slightly above a 30% chance. Since most of the job gains were in sectors with lower paying jobs, this report is not necessarily giving markets an inflationary signal. Given the strength in hiring last month, investors and policy makers will put even more emphasis on next week’s CPI release. Expect some choppy markets in the meantime