Pay in the labor marked has been decelerating for the last 17 months and is now at two year lows.  This is another clear sign that wage inflation is abating.  Those who have changed jobs are earning an average of 8.3% more this year than last year while those in the same job are earning 5.6% more YOY.  That latter figure was +5.7% last month, so the cooling is happening at a healthy pace.  Still, wage-based inflation is almost double the overall official US Inflation Rate which was most recently imputed at 3.2%. Speaking for myself, my wages for 2023 will be 50% lower than 2022, so I’m glad to hear that others are doing so well.  Yea for them.

All that extra pay has provided motivation for laborers to work that much harder: Productivity has increased 5.2% in the last quarter, which is higher than the expected 4.9% and even more so than the last reading of 3.5%. Interestingly enough, the Productivity report shows that total labor costs have actually decreased 1.2% despite higher wages.

The official Jobs Report will be released this Friday, where the Unemployment Rate is expected to jump from 3.7% to 3.9%.

The 10 Year Note is all the way down to 4.14, which is almost 1.0% lower than 30 days ago and I’m feeling pretty good about the prospect of continued lower rates going forward.