Market takes weak NFP in stride

The bond market is actually slightly lower after non-farm payroll growth came out at a meager 51,000. Bloomberg had expected 120,000. There are a couple explanations, one is the previous figure was revised up to 188,000 from 128,000. The last two months job growth has been 239,000 vs. expectations of 248,000. Not much of a miss.

The other is that the unemployment rate fell. Who cares?

The third is that average hourly wages increased by 0.2% versus expectations of 0.3%. That leaves YoY hourly wages increasing at a 4% clip. That's the highest rate since 2001. Again, taking the current readings on inflation, wage growth, etc., I just don't see how the Fed cuts rates aggressively in 2007.