NFP zero in a growing economy?
November 3, 2025
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–Little change in rates Friday. Continued buying of 0QZ5 9700/9725cs which settled 4.75 vs SFRZ6 9688.0 (total position ~80k, paid 4 to 5). This morning Z6 prints 9690.5. It was just under 9700 when Powell said that a cut in December was “not a forgone conclusion”. High print in mid-Oct was 9717. Ten-yr yield ended 4.099%, +0.6 bp.
–This morning SERX5 (1-month SOFR) as of 5:30am EST is 9600 offer, or 4%, the same rate as the Fed’s Standing Repo.
From Lorie Logan’s speech Friday:
“I currently view the average spread of TGCR [tri-party general collateral rate] to IORB as the central, though certainly not only, indicator of how reserve supply needs to evolve.”
–Today’s news includes ISM Mfg, estimated at 49.5 from 49.1 last.
–Another interesting note from Lorie Logan’s speech on Friday (Dallas Fed President). She would have preferred to keep rates steady at the last meeting. “My staff estimates that break-even payroll growth, the number of net new jobs needed to hold unemployment steady, has fallen to around 30,000 jobs per month. ”
The Market Huddle podcast featured Marvin Barth as a guest, and his estimate for b/e payroll growth would have been similar at around 30k, but he added a rather interesting point: He mentioned “solo-preneurs”, people that have broken out of the establishment and have small businesses working for themselves. He puts this cohort as 15-16% of the workforce, and says they aren’t captured by NFP because they aren’t a part of the establishment survey. He mentions Uber drivers, but adds surprisingly, that many of these people are quite high earners (revenues over $1m) and are growing strongly. I suppose podcasters and Only Fans are in this category. (41 minute mark). Because of this group, he says NFP at ZERO can keep actual unemployment steady.
https://www.youtube.com/watch?v=t5dH3vWGxIM&t=4608s
