Issue 120 - Hello and Happy Tuesday.

Another batch of jobs numbers, and another eventual revision, but the markets are going to take the “now” headline and run with it. Batten down the hatches for CPI / PPI this week. Could shift rates in the wrong direction quickly.

Personal Note:
Super proud Dad moment. JJ graduated 1st grade, Grayson graduated 3rd. They are both growing like crazy are excited for summer to be here!

TLDR (Too Long Didn’t Read) Summary

• ↔️ RATES - Same Same

• 📊 TECHNICALS - Labor Markets Showing Cracks

INTEREST RATES
Rates 📢 June 10th, 2025

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Why This Matters

• 🧊 Rates aren’t falling yet — markets are stuck waiting on CPI and PPI inflation reports this week.

• 💣 Risk is to the upside — if inflation comes in hot, bonds will sell off and rates could jump.

• 🧮 Technical indicators are flashing red — bond charts suggest a tough week ahead unless inflation surprises lower.

🔭 What to Watch

• 📅 Wednesday: CPI + 10-Year Treasury Auction

• 📅 Thursday: PPI, Jobless Claims, 30-Year Auction

• 📅 Friday: Consumer Sentiment (UofM)

🔑 Bottom Line for Borrowers: If inflation data goes sideways this week, it could trigger the next rate move up. Lock sooner rather than later.

TECHNICALS
Signs of Softening in the Labor Sector

The headline jobs number looks fine, but I’m not buying it. Every month this year has been revised down, and I think May will be too. The labor market’s softening is what matters for our buyers and sellers.

📰 Jobs Data: Don’t Let the Headlines Fool You

May Jobs Report
✅ 139K jobs added (slightly above expectations)
🚨 But… Household Survey showed 696,000 jobs lost
📉 Full-time positions declined by 623,000
🛠️ Previous months were revised downward – total of -219,000 from Jan–Apr

🏢 Private Sector Hiring Slows to a Crawl

ADP Report Highlights:
📉 Only 37,000 jobs added (vs. 115,000 expected)
👔 Large companies lost 3,000 jobs
🏪 Small businesses cut 13,000 jobs
🍽️ Hospitality led with 38,000 new jobs – but tourism is slowing
💵 Wage growth held steady at 4.5% (existing workers) and 7% (job-changers)

📈 Job Openings Jumped… But It's Not All Good News

🧑‍💻 Openings rose to 7.39M in April (up from 7.2M)
🏥 Growth led by healthcare and professional services
📉 Quit rate and hiring rate stuck near decade lows
🤔 Remote jobs listed in multiple states may be double-counted
⚖️ Openings-to-unemployed ratio now 1:1 (was 2:1 in 2022)

📊 Unemployment Claims Still Hover High

🆕 Initial claims hit 247,000 (highest since October)
📌 Continuing claims remain above 1.9 million
🪓 Job cuts in May surged 50% YoY
📈 Layoffs up 80% compared to Jan–May 2024
🐶 One surprising reason cited: "DOGE" (yes, as in crypto impact)

🔎 What to Watch This Week

💸 CPI (Consumer Price Index) – Wednesday
🏭 PPI (Producer Price Index) – Thursday
💰 Treasury auctions: 10-Year (Wed) + 30-Year (Thurs)