Economy still ‘in good shape’ despite disappointing jobs read: US Bank

Stocks and bonds both rose after the latest update from the Labor Department, despite a dismal reading on job creation in October and downward revisions to the numbers over the past two months.

However, the markets’ upbeat reaction suggests that investors do not see the report as an alarming harbinger of recession.

Instead, it’s just proof that the Federal Reserve was right about the trajectory of the US economy and labor market. Both are cooling, but not so much that investors should be alarmed.

“It tells the story that the economy is in good shape, the labor market is slowing closer to neutral, and therefore Fed policy appears to be slowing closer to neutral,” said Thomas Hainlin, national investment strategist at US Bank Asset Management, during an interview with MarketWatch.

The volatility in this year’s employment data was simply the result of lingering “post-COVID weirdness” in the economy and data, Hainlin said.

Delving into the details of the report, he noted that wage growth appeared relatively modest, which he said should help keep inflationary pressures under control.