Weekly Economic Update: July 8th, 2019
• The fixed income market reacted to stronger than expected employment data with a 10-basis point jump in yield on the two-year Treasury note. For the week, two-year Treasury note yields rose by 12 basis points from 1.75% to 1.87%
• The Labor Department reported on Friday that the economy generated a robust 224 thousand jobs in June—well above expectations of 165 thousand. Smoothing out changes over three- and six-month periods shows that job growth is averaging about 170 thousand a month—modestly slower than the 192 thousand average over the past 12 months, but still a healthy pace that is consistent with maintaining an expansion.
• The ever-tightening labor market is failing to apply pressure to wages. After hitting highs of 3.4 percent in February, wage growth has dwindled. In June, average hourly earnings for all private sector workers increased by only 3.1 percent from a year ago. Furthermore, the annual growth rate slowed to 2.8 percent over the most recent three-month period.