New initial jobless claims and ISM Services PMI data released Thursday morning offer investors fresh insights into the economy. With a week full of economic indicators leading up to Friday's jobs report, what are these figures signaling about Federal Reserve monetary policy?

PGIM Fixed Income Chief U.S. economist Tom Porcelli joins Catalysts to share his analysis.

Porcelli describes the recent weeks of economic data as "interesting," suggesting they likely made the Fed "comfortable" with their decision to initiate the rate cut cycle with a 50 basis point reduction. He observes emerging "cracks" in the labor market, noting that JOLTS data revealed a declining quit rate and a recovering hiring rate, among other indicators that "support that idea." Porcelli believes these labor market dynamics reinforce the Fed's inclination to remain "aggressive" in their monetary policy approach.

Regarding the market outlook, Porcelli predicts, "I would expect that the market remains very choppy." He elaborates, "And that is consistent with the idea that the economy is in the midst of slowing down," though he doesn't anticipate an imminent recession.

For more expert insight and the latest market action, click here to watch this full episode of Catalysts.

This post was written by Angel Smith