Judging from the employment data in the United States in May, the service industry still saw a significant increase, while the retail industry saw building materials and gardening products, all of which are incentives for pushing up inflationary pressure.
Although the unemployment rate has risen to 4%, which has already reached the level of interest rate cuts that Powell once mentioned, inflation is another important data. The increase in unemployment has reduced employee wages, but employee wages in May are still growing. At the same time, the working hours increased by 3 hours, and salary increase + overtime = income increase, which is not friendly to inflation data.
At the same time, the surge in non-agricultural employment has basically brought inflation in May to an unoptimistic expectation. Employment has increased, economic activities have increased, and inflationary pressure has increased. At the same time, in the employment data, employment in the service industry has increased significantly. The high PCE in April caused inflation to continue to be stubborn because of the high service industry. In the retail industry, the increase in employment in building materials and gardening products may also represent the active real estate industry, which will also bring higher rents and push up inflation.
At present, judging from the data of this period, the Fed has no intention of "defensively" cutting interest rates. It will either maintain macroeconomic suppression on the world under high interest rates, or trigger a thunderstorm for everyone to bear together.
Of course, it is also possible that the Fed does not want to cut interest rates, but may be forced to avoid cutting interest rates, because once the interest rate is cut, it means the end of the game in some areas, and the backyard may catch fire, and it happens that the backyard is the most important time to avoid problems.
For the US employment data in May, we will see how the remaining May inflation will extend, and we must continue to wait for the data in June. The single-month data may have data errors and can even be corrected later, but it is a bit abnormal if it continues.
This week, the market game landed with negative news, so wait for the game of the Fed's dot chart and inflation CPI next week.
