By all accounts, the Federal Reserve is ready to hike interest rates in June.
In fact, odds are as high as 94.6%, according to the CME Group.
Beyond June, though, investors are increasingly doubtful we'll see any additional hikes this year. Even Goldman Sachs just pushed back its forecast for a hike in September.
All thanks to recent softness in U.S. employment and inflation.
Granted, after growing by an anemic 79,000 jobs (revised lower from 98,000) in March 2017, payrolls rebounded sharply in April 2017 by more than the expected 190,000. However, in May, the U.S. only added 138,000 jobs, as compared to expectations for 180,000.
It's that "weakness" that's concerning to analysts.
At the same time, we have to remember the labor market is the healthiest it's been in years.
The current economic expansion has now lasted 96 months and is the third largest expansion on record since World War II. Plus, we've watched the U-6 employment number fall to 8.4%.
Meanwhile, the unemployment rate fell to 4.3% from 4.4%, touching its lowest level since 2001.
Hiring was led in part by health care providers, which added 32,000 jobs. Leisure and hospitality added 31,000. Construction and financial jobs increased by 11,000 apiece, as well. The only notable weakness was found in retail, which lost another 6,000, as traditional brick and mortar retailers lose ground to online commerce.
At the same time, average hourly pay was up only 0.2% to $26.22.
While a tighter labor market hasn't really results in explosive wage growth, workers are still seeing somewhat bigger checks. In fact, over the last year, hourly pay has jumped nearly 2.5%, which is bigger as compared to previous years.
Analysts are also concerned about recent inflationary weakness, too.
According to the Commerce Department, inflation rose at just 1.5% over the last 12 months ending in April 2017. That's well below the Fed's healthy target of 2%. Worse, the annual pace of inflation has now fallen in each of the last three months, according to The New York Times.
Analysts are also now predicting that inflation may not rise to 2% until 2018.
That's puzzling, as analysts view the economy to be at or near full employment.
In short, the economy may not ready to leave the nursing station. However, even in times of despair, there's always a way to make money in the markets.