Happy Sunday, everyone, and welcome to my weekly editorial on everything tradable in macro! I was confident heading into last week that the U.S. data releases would bring bond yields lower, and both ISM numbers and NFP aligned with our views.

The NFP report was much weaker than it appeared, with the median duration of unemployment ticking up—a clear symptom of a low-hiring, low-firing labor market with little momentum for those who lost jobs in recent quarters to find new opportunities.

Monthly job creation of around 225k is obviously decent, but this figure is skewed by employees returning from strikes and a lack of substantial positive revisions to the abysmal job creation in October. The trend is now back to around 150k jobs per month at best, which is insufficient to maintain unemployment at its current low levels. This gives Powell the green light to deliver a “Santa Package” for markets at the last FOMC meeting of the year.

Chart 1: Median unemployment duration is rising (kudos to Anna Wong for the chart)