Commenting on this latest Job Openings and Labor Turnover Survey ( JOLTs) data in the US, Max McKechnie, Global Market Strategist at J.P. Morgan Asset Management (JPMAM) said:
“Despite coming in slightly below expectations today’s JOLTS release confirms there is no need for either investors, or the Federal Reserve, to hit the panic button just yet. This release, which if vindicated by a sound payrolls report on Friday still points to a gradual slowdown, warrants a more gradual interest rate response.
“The labour market has needed to cool for some time for inflation to come sustainably back to target. But July’s weak payrolls put the cat amongst the pigeons and threatened the ‘soft landing’ narrative. Today’s figures provide some comfort suggesting that there is still excess demand for workers and the steady pace of normalisation suggests there is some runway left before cooling labour demand starts to significantly drive unemployment.
“In our view, there is enough evidence for the Fed to start easing off the brake. Inflation is cooling allowing the Fed to shift its focus back to the employment side of its mandate. But given the gradual nature of the slowdown only a 25 basis point appears warranted in September.”
