Joey Baghdadi’s Post

May’s job growth came in well above forecasts, as the BLS reported that 272K new jobs were created. However, revisions to the data for March and April shaved 15K jobs from those months combined. In addition, the unemployment rate rose from 3.9% to 4%, which is the highest since January 2022. This report caused rates to spike today but there are some important caveats. Some of it has to do with how these numbers are calculated which can get convoluted. What I find most intriguing is that full time employment keeps loosing steam, we saw over 625k full time job losses while only an increase in 286k in part time employment. If you’re looking at those numbers and wondering how there was 272k new jobs created if that many full time jobs were lost you’re not alone! A big factor is that after someone stops looking for a job for a while they stop counting against the job numbers. Bottom line is that there is underlying weakness to this jobs report that is not reflected in the top line 272k number. The hope is that the Fed sees through this. While this most likely puts a rate cut out of reach for July I still think rates cuts are on the table later in the year. Keep an eye out on the unemployment rate, if that keeps ticking up to around 4.2% then that could be enough for the Fed to intervene.

👀The August U.S. Jobs Report (+142K jobs added) confirms downside risks to the labor market are rising as a result of the Fed’s overly restrictive interest rate policy that is stifling investment and discouraging business activity. 🚨The red-alert # that should force a bigger than expected interest rate cut policy choice in 2 weeks is that private sector job growth is at its weakest since mid-2012 (96K 3-month average). 😟That’s barely half the 3-year trend (+166K) pre-pandemic and a surefire sign business has reduced hiring (seen also in the decade-low hiring rate). 💭The trend of negative jobs growth revisions continued, with a combined 86K fewer jobs added in June + July than originally reported. 👉The unemployment rate dropped from 4.3% to 4.2% (know it was 4.22% in August vs. 4.26% in July). 💪Prime-age employment-population ratio remained 80.9%, a positive sign labor market progress seen in recent years hasn’t faded yet. 📉Reviewing industry employment trends, there’s a lot of caution in thinking about the next few months. 🏗Construction job growth (+34K in August) was impressive but there’s not much runway left in spending + investment + projects to keep that growing at its 2024 pace. It doesn’t mean job losses, but it is hard to see how much more job growth there can be without more work to do. 🏭Manufacturing jobs fell -24K (Aerospace + Automotive especially)- a sign weakening orders and cancellations have taken a toll (directly related to restrictive interest rate policies that discourage lending + investment). 👩⚕️Excepting that big Construction gain, job growth was again concentrated in 2024’s Big 3- Education + Health, Leisure + Hospitality, Government (+117K jobs). Healthcare is one to watch for weakening job growth (it missed job growth expectations) as cost cuts and lower than projected patient volumes are forcing the hand of talent-needy providers to cut hiring. 👏As mentioned yesterday, what gets you an unemployment problem is lower hiring more than mass layoffs. We're seeing lower hiring in many indicators, but one positive to take hope in to maintain soft landing potential is that the job finding rate in August did rise to 26% on a 3-month average and 27.2% on a monthly basis.

U.S. Job Growth Rebounds The labor market added 227,000 jobs, a big rebound from October, when storms in the Southeast and a major strike disrupted work. The unemployment rate ticked up slightly to 4.2 percent. A partial answer may arrive on Friday, when the Labor Department issues its employment report for November. The month’s job growth is set to benefit from some 33,000 Boeing employees returning to work and the Southeast recovering from two major storms. The median forecast among Bloomberg’s survey of economists is for the report to show a gain of 215,000 jobs — a stark contrast to the initial October figure of 12,000 — with the unemployment rate staying at 4.1 percent. That would bring the average growth for the last three months to 150,000 jobs, pending any revisions, only slightly less than the average from March to August. It adds up to a picture of a remarkably steady labor market, though employers are creating just enough jobs to soak up the number of people entering the labor force. That number has slowed in recent months, as fewer migrants have been crossing the border and labor force participation for people in their prime working years has flattened after reaching highs not seen in decades. The rate at which people quit their jobs ticked upward in October, as did the number of job openings. But the hiring rate dropped and remains substantially below prepandemic levels. If November’s job growth comes in weaker than expected, that sluggishness could be a reason, said Thomas Simons, a U.S. economist at the investment bank Jefferies. “We know there are just not that many people looking for work,” he said. “So it would stand to reason that we’d get a number that’s quite a bit softer than what we’ve come to expect for the last 12 to 18 months.” NYTIMES https://lnkd.in/eFTvTkp7

U.S. Job Growth Rebounds The labor market added 227,000 jobs, a big rebound from October, when storms in the Southeast and a major strike disrupted work. The unemployment rate ticked up slightly to 4.2 percent. A partial answer may arrive on Friday, when the Labor Department issues its employment report for November. The month’s job growth is set to benefit from some 33,000 Boeing employees returning to work and the Southeast recovering from two major storms. The median forecast among Bloomberg’s survey of economists is for the report to show a gain of 215,000 jobs — a stark contrast to the initial October figure of 12,000 — with the unemployment rate staying at 4.1 percent. That would bring the average growth for the last three months to 150,000 jobs, pending any revisions, only slightly less than the average from March to August. It adds up to a picture of a remarkably steady labor market, though employers are creating just enough jobs to soak up the number of people entering the labor force. That number has slowed in recent months, as fewer migrants have been crossing the border and labor force participation for people in their prime working years has flattened after reaching highs not seen in decades. The rate at which people quit their jobs ticked upward in October, as did the number of job openings. But the hiring rate dropped and remains substantially below prepandemic levels. If November’s job growth comes in weaker than expected, that sluggishness could be a reason, said Thomas Simons, a U.S. economist at the investment bank Jefferies. “We know there are just not that many people looking for work,” he said. “So it would stand to reason that we’d get a number that’s quite a bit softer than what we’ve come to expect for the last 12 to 18 months.” NYTIMES https://lnkd.in/eEd5pyau

Job openings fell in April to their lowest level since February 2021 as the labor market shows further signs of cooling off from the hiring boom that followed the US economy reopening after the pandemic. New data from the Bureau of Labor Statistics released Tuesday showed there were 8.06 million jobs open at the end of April, a decrease from the 8.35 million job openings in March. March's figure was revised lower from the 8.48 million open jobs initially reported. Economists surveyed by Bloomberg had expected the report to show 8.35 million openings in April. The Job Openings and Labor Turnover Survey (JOLTS) also showed 5.6 million hires were made during the month, little changed from March. The hiring rate held at 3.6%, unchanged from March. Also in Tuesday's report, the quits rate, a sign of confidence among workers, held steady at 2.2%. "The decline in openings points to a slower pace of hiring in the months ahead. However, layoffs remain low, so net job growth should continue to be positive," Oxford Economics lead US economist Nancy Vanden Houten wrote in a note following Tuesday's release. Investors have closely watched the JOLTS report, along with other key labor market data, for signs that cooling labor demand could help inflation pressures ease, strengthening the case for the Federal Reserve to begin lowering interest rates from 23-year highs. Vanden Houten noted that the Fed will welcome signs of cooler labor market conditions from the latest JOLTS report but the central bank likely needs to see further evidence of inflation falling before cutting rates. "The labor market remains healthy enough to allow Fed policy decisions to be primarily guided by readings on inflation," Vanden Houten wrote.

July 2024 Jobs Report: Sharp Slowdown with 114,000 Jobs Added, Likely Fed Rate Cut in September The July jobs report shows a significant slowdown in job growth, with only 114,000 jobs added compared to June's gains. The unemployment rate increased to 4.3%, the highest since October 2021, suggesting a cooling labor market. Average hourly earnings rose by a modest 0.2% month-over-month, pointing to easing inflationary pressures. This report strengthens the likelihood of a Federal Reserve interest rate cut in September. Here are some relevant hashtags to use for the LinkedIn post about the July jobs report: #JobsReport #LaborMarket #EconomicUpdate #Employment #UnemploymentRate #JobGrowth #FederalReserve #InterestRates #EconomicTrends #WageGrowth #Inflation #Finance #Economy #JobMarket #BusinessNews https://lnkd.in/gvbhTKac

Job openings fell more than expected in July. The data comes as investors closely watch for signs of further cooling in the labor market amid speculation the Federal Reserve will cut interest rates this month. New data from the Bureau of Labor Statistics released Wednesday showed there were 7.67 million jobs open at the end of July, a decrease from the 7.91 million seen in June. This marked the lowest number of job openings since January 2021. June's figure was revised lower from the 8.18 million open jobs initially reported. Economists surveyed by Bloomberg had expected the report to show 8.1 million openings in June. The Job Openings and Labor Turnover Survey (JOLTS) also showed 5.5 million hires were made during the month, a slight uptick from June. The hiring rate increased to 3.5% in July, up from 3.3% in June. Also in Wednesday's report, the quits rate, a sign of confidence among workers, rose to 2.1%, up from 2% in June. Oxford Economics senior US economist Nancy Vanden Houten wrote in a note to clients the latest data is a sign "that demand for labor continues to ease." The JOLTS report comes as a slowdown in the labor market has moved into focus. In a speech in late August, Federal Reserve Chair Jerome Powell said the cooling in the labor market has been "unmistakeable." Powell added the downside risks to the central bank's mandate for full employment have risen. "It seems unlikely that the labor market will be a source of elevated inflationary pressures anytime soon," Powell said. "We do not seek or welcome further cooling in labor market conditions." This has pushed economists to argue that further signs of labor market deterioration would likely prompt the central bank to cut interest rates more aggressively.

We LOST 625k full time jobs last month But tell me again how this is the strongest job market ever. The headlines will scream that we’ve added 272k jobs last month, well above the forecast of 200k. But Govt/healthcare made up 127k of that (47%) and we already know the QWEC showed last year’s NFP overstated job growth by almost 800k. So why are we so handcuffed to this NFP headline? Unemployment has a 4-handle for the first time since January 2022. This increase is made all the more interesting by the fact that the labor force participation rate actually dropped. Rates up across the curve 10-13bps and the odds of a July cut are effectively zero. I thought the market was underestimating the odds of a July cut, but it’s tough to imagine that being on the table even if I don’t trust the headline numbers. The T10 breached 4.35%, which will be the new floor on the range until next week’s CPI. I think the odds of a hard landing are going up because the Fed will be overly dependent on jobs headlines.

🤔October’s weak jobs report (+12K jobs gained, steady 4.1% unemployment rate) is hard to interpret due to hurricanes and Aerospace Manufacturing strike related impacts that caused a much lower than usual response rate. Key takeaways: 1️⃣ Things aren’t as bad as +12K appears but know the unemployment rate held steady at 4.1% not because of less unemployment (it rose +150K) but because more people dropped out of the labor force. 2️⃣ Private sector job growth, ex-Healthcare, has been weak over the last 3 months. This is distorting job growth headline #’s- Healthcare is 14% of the workforce but drove 40-55% of job gains from April- October. 3️⃣OTOH, The industry employment diffusion index, with a % above 50 indicating a majority of industries are adding headcount, was 56%, a far healthier % than +12K job gains would suggest. That’s a sign the strikes and storms impacted October payroll estimates. 4️⃣ The job-finding rate for the unemployed fell slightly (26.7% 3M-MA). With the % of Unemployed who are Long-Term Unemployed (unemployed for 15 weeks or longer) rising (39.3%, 3M-MA) substantially this year, this is worrisome for the plight of unemployed people. The average duration of unemployment is at its highest in 2.5 years. 5️⃣ August’s jobs #’s* were downward revised by -81K (from +159K to +78K), which is more in line with how 2024 has seen slowing job gains. Recent trends are showing these could continue for at least another quarter or more. ❗As you parse these numbers and trends, ask yourself, in the next 3-6 months, from what industries will the meaningful job growth come from? *Revisions are normal and have been for decades- this is part of the process where the first results for a given month are based on initial, on-time survey respondents, the 2nd (and 1st round of revisions) incorporate late submissions, and the 3rd (and 2nd, last round of revisions) incorporate all that have been received for that month.

Is anyone else as confused by this labor market as I am? I give the Fed a lot of credit for threading the needle and (apparently? hopefully?) avoiding a recession. But we're not seeing a big comeback in middle market jobs. Interesting to see the hiring rate fall with the increase in openings. The quit rate also increased, indicating confidence from workers in the labor market. What are y'all seeing in the market? https://lnkd.in/eGB6wVfM