US Labour Market: Cooling, Not Cracking

Payrolls are decelerating and wage growth is easing toward 3.5%, consistent with the Fed cutting twice into year-end rather than holding. We turn constructive on the front end of the UST curve and expect 10Y yields to drift lower. Soft-landing odds have risen; credit should hold in absent a growth scare.

The three-month payroll average has rolled over without the layoff wave a recession would bring. This is the texture of a soft landing. We add duration on dips and prefer belly-of-the-curve UST exposure. The risk to the view is a re-acceleration in shelter inflation that keeps the Fed on hold.

Reference

MR-US-LABOUR-2026-06

Region

AMERICAS

Asset class

RATES

Published

03 Jul 2026