What is a WP?
<> Think of a WP as the “constitution” of a project.
This entails everything about the project entire, all the info you need to know, must be found there.
It could be tiring reading the WP of a project, maybe due to complexity whatsoever.
So let’s keep it simple…
Volatile day today dawgs.
Today's US data dump includes CPI + Labor data at the same time.
🧵: That’s heavy & here’s how to read it.
1/ USD CPI m/m (Consumer Price Index - month over month)
What it is:
How much prices increased this month vs last month.
Why it's important:
This shows inflation speed. The Fed watches this closely.
Market reaction:
• Higher than forecast = USD pumps, risk assets dumps.
• Lower than forecast = USD dumps, risk assets pumps
2/ USD CPI y/y (year over year)
What it is:
Inflation compared to same month last year.
Why you gonna care:
Shows whether inflation is structurally cooling or sticky.
Market reaction:
• Higher y/y = inflation still a problem = hawkish Fed
• Lower y/y = disinflation = rate cuts closer
If m/m and y/y agree, then the move is stronger.
3/ USD Core CPI m/m
What it is:
Inflation excluding food & energy (the Fed’s favorite).
Why it matters:
This is the real signal for policy imom
Market reaction:
• Core CPI hot = USD pumps hard
• Core CPI cool = USD dumps hard
If headline CPI cools but core stays hot, markets get choppy then.
4/ USD Unemployment Rate
What it is:
% of people actively looking for work but unemployed.
Why it matters:
Labor market strength = Fed policy flexibility.
Market reaction:
• Lower unemployment > economy strong > rates stay high
• Higher unemployment > slowdown > rate cuts sooner
Alone it’s mid, but with NFP it’s powerful.
5/ USD Average Hourly Earnings m/m
What it is:
How fast wages are growing.
Why it matters:
Wage growth = inflation fuel.
Market reaction:
• Higher wages > inflation risk > USD pumps, risk assets dumps.
• Lower wages > inflation cooling > USD dumps
This even can override NFP if it surprises.
6/ USD Non-Farm Employment Change (this is NFP)
What it is:
How many new jobs were added this month.
Why it matters:
Jobs = growth + consumer spending.
Market reaction:
• Higher than forecast = USD pumps
• Lower than forecast = USD dumps
How I gonna read this:
Tbh, I wanna see alignments etc.
• Hot CPI + strong jobs + rising wages = USD bullish trend
• Cool CPI + weak jobs + slowing wages = USD bearish trend
• Mixed data = whipsaws, so I gonna wait
Manage your risks well ahead of time or simply wait.
Meanwhile, the last official release from the U.S. Bureau of Labor Statistics showed:
• NFP: +50K > hiring slowed sharply
• Unemployment: 4.4% > labor market softening
• Wages: steady, not accelerating
• CPI (YoY): ~2.7%
• Core CPI: ~2.6% > still sticky, but cooling
That being said, the market already expects:
• slower job growth
• cooling (but not dead) inflation
Above all, today’s real question is:
"If inflation will cool fast enough as the labor market weakens?"