Data today out of U.S showed Labor Productivity* rose for Q3 beating consensus estimates by 30 bps and increasing sharply from Q2 reading of 4.7%. Q3 Unit Labor costs were down 1.20%, beating consensus estimates of -0.90% and prior month reading of -0.80%.
The ADP employment numbers showed private payrolls added 103,000 jobs in November, -27K from consensus est and below prior reading of 113K. Acc to the press release, the post pandemic boost that saw strong job creation in Restaurants and Hotels, is behind us and the return to trend in Leisure and Hospitality suggests the economy as a whole will see more moderate hiring and wage growth in 2024.
Today's data comes after the surprisingly lower JOLTS data yesterday and elevated continuing claims data.
The data shows better demand and supply balance occurring in the labor market coupled with labor productivity gains bodes well for a soft landing narrative.
US2s are trading at 4.585% from session highs of 4.6250% and US10s keep pushing lower to trade lows of 4.11%. US2s10s are bull flattening with the spread 6.50 bps lower on the day at -0.4780.
*Changes in the amount of goods and services produced per hour.
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