Market Updates

Weekly Economic Update: December 5, 2022

• Yields fell over the week with the two-year Treasury note falling by 22 basis points to 4.29% while the five-year note decreased by 21 basis points to 3.66%

• Labor markets remain tight as the economy added a greater than expected 263 thousand to payrolls in November while October was revised upward by an additional 23 thousand

• Wage growth advanced robustly in November as average hourly earnings accelerated by a double than expected 0.6%, what’s more troubling is that the increases were seen across the services sector, the main culprit driving inflation at this point in the cycle

• In addition to tight labor markets and elevated wage growth, labor force participation fell in November, much to the Fed’s ire as they enter a blackout period until their December 13th-14th meeting where it is they will hike the Fed funds rate by 50 basis points to an upper bound of 4.50%

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