THE US HAS REPORTED THREE CONSECUTIVE MONTHS OF RELATIVELY STRONG JOB GROWTH.

BUT INVESTORS, MYOPICALLY FOCUSED ON HEADLINE INFLATION, GOT A BIT AHEAD OF THEMSELVES YESTERDAY. FIRST, JOB GROWTH SEEMS TO BE ACCOMPANIED BY STRONGER GDP GROWTH, REDUCING THE RISK OF STAGFLATION, AT LEAST IN THE US. SECOND, EARNINGS GROWTH IS CLEARLY ON THE RISE. LARGELY DRIVEN BY THE AI BOOM (WHICH MAKES THIS ‘BUBBLE’ BY DEFINITION DIFFERENT FROM THE ‘DOTCOM’ BUBBLE), BUT STRONGER GDP GROWTH SHOULD BROADEN EARNINGS

Three months of strong job growth and GDP reduce stagflation risk, countering inflation myopia.