Jobs Day Preview

The Most Important One Ever

Yesterday’s JOLTS data sent an unambiguous signal of a slowdown in the labor market:  the labor market is no longer bussin.  This is a feature, not a bug. 

However, the line between a “mid” labor market, which is where it is now, and one that is sus and on the verge of rolling over to actively shedding jobs, is a thin one.

This is due to convexity, which was present in the July employment report and was flagged in the U.S. Economic Growth Update on August 25, 2024:  a 20-basis point climb in the July U3 rate versus the 10-basis point month-to month changes that were the norm throughout the current calendar year.

In Pinebrook’s view, the following U3 rates will have the most likely policy outcomes: