Scott Ladner, chief investment officer at Horizon Investments:
There’s only 1 way out of this (*in the Fed’s framework*) and that is to continue to set policy to crush the demand side, but we haven’t seen any progress on that front yet. This makes a policy mistake from the Fed almost a certainty, if it wasn’t already.
Cliff Hodge, chief investment officer for Cornerstone Financial:
While the headline payrolls number was strong, the wage data is going to be eye-popping for the Fed. The 0.6% month-over-month wage growth number matched the highest level all year. Higher wages feed into higher inflation, which will no doubt keep pressure on the Fed and should increase expectations for the terminal rate.
We got no help from the participation rate, which continues to move in the wrong direction and will keep competition for labor high until the economy inevitably rolls over sometime next year.
Peter Tchir, head of macro strategy at Academy Securities:
The big news is earnings! Last month was up 0.5% instead of original 0.4% and this month was up a whopping 0.6% (versus 0.3% expected). Fed will not like that.
Dennis DeBusschere, founder of 22V Research:
Very strong ... very -- and at odds with everything else we have seen on the labor side. Everyone was asking about bad economic growth being bad for markets going in -- don’t have to worry about that today. This was too strong and is bad for risk assets. We don’t think this changes the outlook for economic growth at all. It is clearly slowing and will continue to do so. The risk is we have more S&P 500 declines/financial conditions to ensure that a slowdown happens.
--With assistance from Emily Graffeo and Peyton Forte.
This article was provided by Bloomberg News.