It’s still too early to tell whether or not we can expect a “soft landing” from the economy after the jumps and jolts experienced these last few years. The Fed left rates unchanged this week and there’s an 85% likelihood that they’ll repeat that decision at next month’s meeting. Interest rates currently sit at 22 year highs, however, Fed Governors out on the speaking circuit are tight lipped about the future of monetary policy, and are quick to insert that they prefer to maintain the optionality to adjust as circumstances warrant.
Today’s Jobs Report showed that workers are putting in fewer hours each week, but are getting paid 0.2% more than last month and 4.0% more than last year. Wage-based inflation remains a concern, but the pressure has eased somewhat from last month’s 4.3% YOY reading. Moreover, only 150K jobs were created last month, which is only half of last month’s epic hiring spree. The deceleration of onboarding employees in October has resulted in the Unemployment Rate ticking up one notch from 3.8% to 3.9%.
The result of these occurrences is that after being on the up escalator since May, interest rates are taking a breather and have actually improved 3/8% over the last few days. I don’t know that this reversal will continue in the same linear fashion and with the same velocity as that with which interest rates ratcheted higher, but man I’d love to see some relief in the housing sector heading into winter.