Digesting the numbers: The toasty jobs report and its impact on the macro landscape

The toasty jobs number leaves the macro picture primarily intact.

Critics of the "soft landing" narrative may argue that the jobless rate is still "too low" to align with price stability. However, it's essential to note that pessimistic views tend to fluctuate based on incoming data. Earlier in the week, when the JOLTS report revealed a significant drop in job openings and ADP figures fell short, pessimists warned of a potential spike in the unemployment rate. Interestingly, some of these same critics have shifted their stance, suggesting that unemployment isn't high enough.

From a broader perspective, there are worse things than having a robust reading on job creation, especially when there is an expectation that inflation is still on course to moderate further. While Friday's labour market update was above consensus, no alarm bells were ringing to send the market scurrying for cover as it is unlikely officials will be overly concerned about the limited progress towards a 4 % unemployment rate, especially if the Consumer Price Index (CPI) doesn't overshoot expectations on Tuesday.

The current Fed policy stance is less urgent, given that core inflation is coming down the mountain quickly, and commodity price pressures remain subdued. With benign inflation dynamics, equities have some breathing room to wether minimal beats on jobs data.