April 6, 2018
Payroll growth slowed but wage pressures grew, the mix of a March employment report that keeps in place expectations for no more than gradual rate tightening by the Fed. Nonfarm payrolls rose only 103,000 which was well under expectations with a large downward revision pulling the first-quarter average down to 202,000 and below the fourth quarter's 221,000. But average hourly earnings did show incremental strength, at 0.3 percent monthly and up 1 tenth for the year-on-year rate which is at 2.7 percent and moving toward the 3 percent line where spillover into general prices is seen taking hold. Fed Chair Jerome Powell underscored the risk saying in a speech that inflation may rise "notably" in the spring.
Stocks showed limited reaction to the data though selling, likely fed by trade-war saber rattling, picked up speed through the session as the Dow, at 23,932, stumbled 2.3 percent on the day for a 0.7 percent dip on the week. Money eased out of the bond market with the 10-year yield up a modest 4 basis points in the week to 2.78 percent. The dollar index was unchanged on the week at 90.10 while gold edged higher, to $1,336, and oil fell a sharp 4.5 percent to $62.00.