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Nail In The Coffin: Hot Comp Costs Rule Out Fed Cuts
Bad news for doves: A key gauge of employment costs watched closely by Fed officials was much warmer than expected last quarter, a development that'll almost surely get a mention by Jerome Powell during this week's press conference.
The Employment Cost Index rose 1.2% in Q1, the BLS's quarterly update, released on Tuesday, showed.
That was meaningfully ahead of consensus, the briskest in a year on a rounded basis and the quickest since Q3 2022 unrounded (decimals!).
Private wages and salari
I see a new DOW 5 year issue at 5.25%, a whopping 56bp spread to UST. How are financial conditions “tight”?
Update earnings tracking. All % market-cap weighted. 52% of S&P500 have reported, 74% beat 1Q cons rev, 89% beat 1Q cons EPS, 38% saw 2Q cons rev increase, 53% saw cons 2Q EPS increase, average price +0.8% reaction to reports.
Case-Schiller national index +6.4% YOY in Feb 2024.
National rent indices (e.g. https://www.apartmentlist.com/research/national-rent-data May 2024 report) suggest average actual (not asking) rent YOY only slightly negative and rising.
Several apartment REITs report 5/1-5/3.
My guess (only) is that rent growth turns positive YOY in 2H24. May still lag expense growth but for inflation, not helpful.
Looks like ADP was on to something