Soft landing
Been in the US for the past little while - east coast and west coast - and it's been pretty interesting, to say the least.
On the one hand - and this is hardly an original observation - it appears all too easy to fall through the safety net, and the easy access to both legal and illegal drugs evidently isn't helping matters.
On the other hand, while I've largely been in areas populated by many tourists, you'd be hard pressed to conclude anything other than that the consumer economy is still fairly romping along.
A couple of other things of note.
New weight loss drugs have become widely available and are being advertised all over the place, to the extent that for the first time in decades obesity rates are actually in decline, despite the alarming levels of sugar consumption (it's darned hard to avoid consuming the donuts, I must admit).
Also, housing prices remain at record highs...and in Los Angeles are fairly roaring ahead.
Despite all of the monetary tightening, in nominal terms housing and stock markets have seemed almost unbreakable.
The trend for housing prices appears to be similar in Boston on the east coast, and indeed nationally.
My Uber driver told me that residents in LA often don't even look at homes priced below US$700-800k, because they know in advance that won't be liveable.
Housing that you'd be happily prepared to live in generally seems to be extremely expensive on the west coast (especially when you convert to Aussie dollar terms), leading some prospective homeowners to move to other states further south, such as Texas and Georgia.
Jobs data beats
In that context, the Bureau of Labor Statistics released the latest payrolls figures, which were far stronger than expected, with employment rising +254,000, and revisions to the preceding months adding a further +72,000.
This was far better than median market expectations, and bond yields jumped.
As with Australia, much of the hiring has been for government and healthcare roles, and in aggregate employment has increased for 45 months consecutively.
The unemployment rate dropped lower at 4.1 per cent, down from 4.3 per cent two months earlier.
Average hourly earnings were also hotter than expected, rising +4 per cent over the year.
Ahead of this report it had been expected that the Federal Reserve would deliver another 50 basis points interest rate cut at the next meeting.
However, these numbers were far better than expected, and expectations have been pared back to a much more likely 25 basis points easing.
Oil prices have also jumped by around +10 per cent from their lows this week on escalation in the Middle East, which will further temper some of the expectations around interest rates.
