The July JOLTS report reveals a concerning trend in the US labor market, as job openings fell to 7.673 million, the lowest since January 2021. This drop points to a cooling labor market that analysts had not anticipated at such a rapid pace.
The reaction to the report was significant, with equities declining sharply and Treasuries rallying. This underscores the current market's heightened sensitivity to economic data, where any negative news exacerbates fears of a slowing economy.
As participants pivot their focus toward downside growth risks, the report indicates a growing consensus that 'bad news is bad news,' raising the stakes for the upcoming jobs report on Friday.
The market adjustment following the JOLTS print suggests it has begun to factor in a higher probability of a 50 basis point cut in September, reflecting the urgency for monetary policy adjustments.
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