Perception vs. Reality:

Job growth surged in August as the economy hit the gas - CBS

In August payrolls grew by 201k, 11k more than expected but that was completely offset and then some

by the downward revisions of a combined 50k in the two prior months. According to the household

survey, 423k jobs were lost but because the size of the labor force fell by 469k, the unemployment rate

ticked up by one tenth to 3.9% but the all in U6 rate was down one tenth to 7.4% as the number of

those NOT in the labor force rose to 96.3mm, a fresh record high. The participation rate fell by two

tenths to 62.7%, matching the lowest since May 2016 and the employment to population ratio fell too.

Job Leavers as a percent of unemployed, a measure of those having confidence in leaving their market

for greener pastures (aka, higher wages) rose to 14%, the highest since October 2000...In terms of the market response, call this news stagflationary as Treasuries are solely responding to the wage news and not the jobs miss. The 2 yr yield is jumping by 4 bps to 2.68%, matching the highest level in 10 years. The 10 yr yield is higher by almost 5 bps to 2.92%.