Recent labor market data is sending mixed signals. Wage growth is holding steady around 4%, with middle-income earners seeing the strongest gains according to regional Fed data. Meanwhile, inflation has cooled below 3%, easing pressure on purchasing power.

Here's the catch though—the unemployment rate is creeping upward. That's the part worth watching closely. When job losses accelerate, consumers typically pull back on spending and risk appetite tends to fade. For markets driven by sentiment and capital flows, that shift matters more than most realize.

So yes, the affordability squeeze has loosened its grip somewhat, but the labor market's stability is far from guaranteed.