Image source: Pixabay

Forget the good news in the jobs report -- record unemployment and underemployment rates -- let's focus instead on the weakness in wage growth (all thank to revisions).

Revisions to average hourly earnings data paint a marginally less worrisome picture for the Fed on wages than the Nov report

The upturn in wage growth in Nov (originally reported as +0.6%) was revised (to +0.4%)

The 4.6% annual wage growth in Dec was the lowest since Aug '21 pic.twitter.com/1lCjoDjcMe

— Nick Timiraos (@NickTimiraos) January 6, 2023

And that 'bad' news is just what stocks wanted.

Bond yields plunged, led by the short-end.

Gold also spiked, moving back above $1850.

And the dollar was dumped.

And most importantly, Fed rate trajectory expectations shifted dovishly lower (lower terminal rate and more rate-cuts).

These easing financial conditions are not what the Fed wants to see.

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