Episode summary
Reaction to the May Jobs Report | Bloomberg Surveillance
Bloomberg Surveillance
· · 36 min · Hosts: Tom Keene, Paul Sweeney, Lisa Mateo, Michael Barr · Guests: Claudia Sahm, Kevin Gordon, Kristina Campmany, Frances Donald, David Sowerby
Summary
The jobs report was read as solid rather than overheated: payroll gains were positive, revisions were manageable, unemployment and underemployment stayed low, and wage growth continued to slow. Claudia Sahm argued the Fed is not anti-jobs but anti-inflation, and said she did not see the kind of wage pressure that would create a second round of inflation.
The market reaction was immediate, with Treasury yields jumping and stock futures slipping. Kristina Campmany said the report forced investors to keep rethinking the path for rates, while Frances Donald argued the stronger labor data supports a roughly 2% real GDP outlook and weakens the case for an easing bias from the Fed. She said the real issue is not whether people have jobs, but whether wages are keeping up with the cost of living.
On equities, Kevin Gordon said market breadth remains weak despite AI enthusiasm and strong mega-cap leadership, while David Sowerby described the market as unusually narrow but still supported by earnings, productivity, and a resilient consumer. He highlighted data centers, infrastructure, travel, and select smaller companies as ways to benefit from the current cycle.
Key takeaways
- Claudia Sahm said the May payroll report was solid, with moderate wage growth reducing the case for an inflation scare.
- Frances Donald said the report supports about 2% real GDP growth and argues against an easing bias from the Fed.
- Kevin Gordon said breadth remains weak even as AI and semiconductors keep driving a narrow market higher.
- Kristina Campmany said front-end yields reprice quickly on labor data, but the Fed still lacks high conviction for a new hiking cycle.
- David Sowerby said the market is the narrowest he has seen in 25 years, but productivity and earnings can still support equities.
Notable quotes
“the Fed is not anti-jobs. They're anti-inflation, right”
“this really does look if nothing else really puts the exclamation point on a stabilization in the labor market relative to last year”
“There's clearly money going into credit funds more so than rates”
“the average stock when you look at the percentage of companies above their 200-day moving average”
“America needs workers not jobs and this is a good report of that”
How the episode opens
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Jobs report we begin our coverage here. We are thrilled to bring you Claudia Sahm, chief economist New Century Advisors as we go into the report. It's a jump condition, five basis points, 452 on the 10-year, 5.01 on the 30-year bond. Basically what Preet asked me said, you know, X number of minutes ago, like you're 1/3 of the way to her tension.
Exactly, right. And even And on the short end, Tom, which is kind of reflects where maybe the Fed's thinking about, up six basis points on the two-year Treasury, 4.1% and futures S&P off 45, Tom. — Claudia Sahm with us here for a few minutes of perspective. Claudia, I I get the idea that nonfarm payrolls are tough to call, but I got a 93,000 plus two-month payroll revision. And what really pauses me is even the underemployment rate came down from 8.2 to 8.1%. How does the chairman respond to this when he's cutting the curtains for the new office?
Right. Well, I mean, you know, it's good news on adding jobs. I think one for the Fed, this isn't such a worrisome print in that wage growth was still pretty moderate.
We're still seeing slowing in wage growth. So, you know, the Fed is not anti-jobs. They're anti-inflation, right?
Like so, you know, if you're not seeing those cost pressures push in, you know, this can be These are still pretty modest numbers in terms of adding payrolls. They're much better than what we saw last year.
From the episode’s captions: roughly the first two minutes, lightly cleaned. Keep watching on YouTube →
Topics
- may jobs report
- labor market
- inflation outlook
- two-tiered us economy
- market open stocks
Companies and tickers mentioned
- IVZ
- SCHW
- RBC
- Invesco
- Charles Schwab
- Royal Bank of Canada
- New Century Advisors
- Ancora
Watch the episode
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Summary, takeaways and quote selection by Octagon. Quotes are short excerpts; the full conversation is in the episode.
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