For the past 10 months, the consensus has expected a slowdown in the labor market, but every month the data has come in better than the consensus expected, see chart below.
This all-time high in being consistently too bearish since 1998 is noteworthy, and investors should reevaluate whether the ongoing bearishness on the economic outlook is justified, in particular in a situation with nonfarm payrolls at 517,000, the unemployment rate at the lowest level since the 1960s, and very strong retail sales.
The bottom line is that the no landing scenario continues, and the Fed has to increase interest rates more than the market expects to slow the economy down and get inflation back to the FOMC’s 2% inflation target.
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