The Labor Market's Departure Point for the Next Leg of the Cycle

The ADP series this past week showed an impressive 497,000 jobs added according to the alternative private payrolls measure. But despite almost half a million workers being added, we actually saw an ongoing cooling in the annualized wage gains. The labor demand side of the equation is at least marginally helping take the upward pressure off of wages. And so given these risks, looking at a two year yield that's right near 5% doesn't seem like such a bad buying opportunity over a medium term time horizon.