US nonfarm payrolls (+199k) disappointed loftier expectations, but what drove bond yields higher in a bear steepener Treasury move was the combined effect of the decline in the unemployment rate to a pre-pandemic low that signals tight job markets, plus the strength of wage gains that reinforces the point about tightening job markets. To the Fed’s dual mandate, such evidence suggests that the wage-price connection is increasingly challenging its price stability goal while we may already be at maximum employment or very close to it. Denting some of the consensus miss was the fact that nonfarm payrolls were revised up ... (full story)