On the May Jobs Report

https://trendmacro.com/system/files/reports/20240607trendmacroluskin-r3.pdf
Donald L. Luskin
Friday, June 7, 2024
Another big beat thanks to immigration – but a mixed bag that won’t move the Fed.
US Macro
Federal Reserve
The “labor market weakness” Wall Street has been harping on all week failed to materialize, just as we expected. 272,000 payrolls was another big beat versus the consensus, as the effects of massive immigration on job creation continues to be underappreciated. The “household survey” contradicted the “payroll survey,” showing net job losses. More than all those losses were native-born, with foreign-born employment rising sharply. Our model based on many labor indicators confirms the payroll survey. This is a mixed bag, and it will likely make no difference to the Fed at next week’s FOMC. Futures took out half a rate cut at the report, but continue to expect the first cut in December. It doesn’t matter much at this point, with the Fed self-evidently much closer to a neutral policy posture than it claims.