The US Bureau of Labor Statistics released its Job Openings & Labor Turnover Survey (JOLTS) data July which revealed 7.67 million job openings in the month, lower than the estimated 8.1 million. This marks the lowest level since January 2021.
Catalyst Anchors Madison Mills and Brad Smith break down the latest jobs data and what it is signaling for the labor market ahead of the August jobs report due out Friday.
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This post was written by Nicholas Jacobino
But first, let's get to that breaking July jolts data. 7.67 million job openings. Economists were expecting 8.1 million openings. It's interesting. We're seeing a little bit of recovery here in the S&P 500. The Nasdaq still under pressure here. Job openings falling by nearly 250,000 in July from the prior month. Again, as I mentioned, this is the lowest level since January of 2021 here. Also seen a little bit of an uptick in firings and layoffs to 1.7. That is up from just under 1.7 in July of last year. So seeing just a bit of an uptick here in layoffs and discharges. Brad, coming in at 1.1% in July versus 1% in June. I think the big question is this softness in the labor market that we are starting to see here soft enough to push the Fed for a 50 basis point cut, come September, and what that will potentially look like moving forward into that jobs report on Friday.
Yeah, it's a definite on 25, maybe on 50 at this juncture. And that's what markets are trying to get ahead of as of right now. And I say definitely with a bit of gesture to it. But at the same time, it's essentially what Fed chair Jerome Powell has telegraphed because of that Jackson Hole meeting and the tenor that we heard come from the Fed chair himself. And so now, to your point, it squarely looks out to, okay, beyond September, what does that pathway of rate cuts look like? And I'm looking at the CME Fed Watch probability of where we could be come the end of December or at least after that December meeting here. And the highest probability right now for the target rate or where we could be eventually by that point, there's a 43% chance here or probability that we could be in this range of 4 and a quarter to 4 and a half. Now, what would need to take place from this point right now. I remind you that the current target rate right now, we're at 5 and a quarter to 5 and a half. So there would need to be at least one of those 50 basis point cuts that take place between now and then as well. If there's enough deterioration and what the Fed is continuing to track and prioritize in the employment situation right now too.
And that's why bad news is starting to really be bad news, right? Bad news for the labor market is bad news for markets right now as well. So it's interesting. We're going to continue of course to monitor that, Brad.
