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Labor Market Softens

August 7, 2026 The July employment report was the week’s dominant story as U.S. employers unexpectedly cut jobs during the

Fed Holds Amid Mixed Signals

This week included the much-anticipated Federal Open Market Committee meeting concluding on July 29th. The Federal Reserve held its policy

Treasury Yields Rise on Data

July 24th, 2026 A renewed climb in oil prices and firm economic data pushed U.S. Treasury yields to fresh highs

Core Inflation Shows Moderation

July 17th, 2026 The week’s marquee economic data releases showed inflation cooling more than expected in June. Headline Consumer Price

1/7- Weekly Economic Highlights

Job growth slowed in December, with US nonfarm payroll growth of just 199,000 in the month versus the consensus forecast of 450,000, but the unemployment rate still declined to 3.9%, the lowest level since February 2020. Nonfarm payrolls for the prior two months were revised higher by a total of 141,000. On a trailing 3-month and 6-month basis, payrolls increased an average of 365,000 and 508,000 per month, respectively, which still compares favorably to the average job gains in the five years leading up to the pandemic of about 196,000 per month. We believe a variety of factors are keeping some workers out of the labor force for now, which continues to hold back job growth despite strong demand from employers. We believe the resurgence of the virus in December has likely prolonged some workers from returning to the labor force. The labor participation rate was unchanged in December at 61.9% and remains lower than the pre-pandemic level of 63.4%. The employment-population ratio increased to 59.5% in December from 59.3% in November, but also remains below the pre-pandemic level of 61.2%. In our view, labor participation will likely improve gradually as the health situation improves. The U-6 underemployment rate, which includes those who are marginally attached to the labor force and employed part time for economic reasons, declined to 7.3% in December from 7.7% in November (versus 7.0% in February 2020). Annualized average hourly earnings rose 0.6% month-over-month and were up 4.7% year-over-year in December versus 5.1% in November. Although wage growth eased slightly on a year-over-year basis in December, we believe the month-over-month gain is indicative of an ongoing imbalance in the supply and demand for labor which may keep upward pressure on wages over the near- to intermediate-term.

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Holiday Closure Notice:

Chandler will be closed on Friday, July 3 in observance of Independence Day.