Economic data is traditionally one of the key contributors to interest rate movement. Of the regularly scheduled reports, none has more market-moving street cred than The Employment Situation–otherwise known as “the jobs report” or simply NFP (due to its headline component: Non-Farm Payrolls).

The relationship between econ data and rates can wax and wane.  Covid threw a wrench in the works, and economists still don’t know exactly how things will shake out.  In general, the market is trading on the assumption that things continue to improve even if the data isn’t making that case today.

In fact, today’s jobs report specifically suggests something quite different.  The economy only created 49k new jobs in January, and the last few reports were revised much lower to boot.  Taken together, these reports effectively put an end to the “correction” phase of the labor market recovery.

In other words, payrolls plummeted at the onset of COVID-19 (“contraction” phase).  They’d been bouncing back in record fashion through September but have since returned to closer to zero growth.  That’s not great news considering we’re still roughly 10 million jobs away from pre-COVID-19 levels.