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This week is about the labor market! Tomorrow, with Jobs report, let’s dive and get the position of playing on where things are standing.
My favorite way to get a high-level pulse on the labor market is taking a look at the Labor Market Spider Chart of Atlanta Fed:
A year ago and compared to the pre-covid trend, we can brighten some common trends:
- The private sector is quite weak and continues. The rate of rent is very low, so that people can hold their jobs and avoid leaving at all costs.
- The wage hike, one of the major drivers of the huge inflation we observed in 2021–2022, continue to soften to remain in the balance of labor market.
- Generally, it is a bad time to look for a new job, but until you leave, it is not possible that you will be closed either.
With stage sets, let’s dig into all the labor market data we receive this week.
Shock
On Monday, we received the Jolts report for April, which was quite strong.
The job opening is more than 7.39 million, above 7.10 million unanimous expectations.
However, when it is actually contrary to high-existing data such as job posting, it is likely to be an external bounce high that is likely to return down next month.
The number of job openings of one of the major insights to understand the slack in the labor market is comparing for unemployment.
Fed was able to increase the fed so aggressively in 2022 without damaging the labor market, as the huge amount of job openings acted as a buffer so that the unemployment rate could not last. Bearridge curve is the best way to see this dynamic.
As we can see from this week’s print, we kept stable at a low end of the job vacancy rate, where just to avoid acceleration in unemployment, the labor market is simply lethargic enough:
Claim data
Today we got the data of claims, which provides one of the more high-existing labor market data points that we can see every week.
Interestingly, the issued claims – which had seen a new cycle high last week – was less modified and now returned within the limits:
Finally, we receive jobs report tomorrow, which will take a good look at how the labor market is digesting the effect of tariff:
Overall, according to the data of this week, a picture of a labor market that remains on thin ice.
It is not quite bad to crack ice – but still strong enough to catch the economy.
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