Friday’s market action made its position clear: most of the move was driven by short covering.
In the United States, doubts are temporarily put aside and the dominant principle remains: BE POSITIVE ANYWAY.
1. Employment Report – February 11
The unemployment rate rose slightly from 4.4% to 4.5%. This increase is seasonal and occurs
almost every year due to the end of temporary employment linked to the December holiday period.
Positive Elements
- Hourly earnings: +0.3% month-over-month
- Hourly earnings: +3.8% year-over-year
- Average weekly hours: stable at 34.2
At the single-employee level, real hourly earnings remain broadly unchanged, fluctuating between
+0.90% and +0.95%. At the total employee level, real earnings decline slightly to +1.40% from
+1.50% in December.
While still positive, these levels are too low to generate a strong consumption impulse.
If this trend is confirmed, a key question emerges: who will buy high-priced AI products and
services when consumers are increasingly focused on average-priced goods and services?
Labor Market Dynamics
Continuing jobless claims improved significantly. Between December 27 and January 24,
claims declined by approximately 70,000, with most of the reduction coming from re-employment.
Job openings indicate a cooling labor market, but only in sectors with low or moderate added value.
Using the job opening-to-unemployment ratio (the number of job openings per unemployed person),
ratios above 1 still signal a hot market.
Job Opening / Unemployment Ratios – December
- Construction: 0.50
- Manufacturing: 0.86
- Trade: 0.67
- Financial Activities: 1.20
- Professional & Business Services: 1.14
- Education & Health Services: 1.84
This confirms strong demand for high-skill, education-intensive jobs, a demand that remains
only partially satisfied.
2. CPI – February 13
A significant year-on-year decline in CPI is expected for January.
The January CPI compares against a high baseline from January 2025 (+0.65%).
Assuming an all-items CPI increase of +0.20% month-over-month in January,
the year-on-year CPI would decline from 2.68% in December to approximately
2.20–2.25% in January.
The key unknown for the coming months is the impact of tariff increases.
Excess inventories accumulated in Q1 2024, ahead of the tariff hike,
are now largely exhausted.
Prices Excluding Food and Healthcare
- Gasoline: -2.56% (January vs. December)
- Diesel: -1.68%
- Natural Gas: +18.20%
The rise in natural gas prices affects electricity costs, housing expenses,
and industrial production.
Mortgage Rates
- 30Y Jumbo: 6.43% (Dec) → 6.35% (Jan)
- 30Y Conventional: 6.19% (Dec) → 6.08% (Jan)
Mortgage rates remain stable and do not currently generate inflationary pressure.
In this environment, declining rates are only partially linked to CPI movements.
Structural Constraints
The most significant forces shaping the macro backdrop are structural rather than cyclical:
- An expanding fiscal deficit, which could worsen in the event of conflict with Iran
- The need to sustain deficit financing through elevated interest rates
- A structurally weaker U.S. dollar as a consequence
The system presents both strengths and vulnerabilities.
Yet from a market perspective, the operating rule remains unchanged:
BE POSITIVE ANYWAY.