"I believe the Federal Reserve views this data positively because its primary goal is to reduce wage growth back to around 3%. They don't have much faith in the productivity growth narrative, so achieving 3% wage growth with 1% productivity could help reach the 2% inflation target. Now that there are more unemployed Americans than job openings, this situation should provide them with some reassurance."
"As shown below, the Fed has made significant progress in reducing job openings from nearly 12 million following the COVID recession to about 7.2 million. We have several more important economic reports coming out this week, including the ADP jobs report, jobless claims report and the crucial monthly nonfarm payroll jobs report from the BLS on Friday. The previous BLS jobs report was significantly below expectations, so even a small improvement would be notable."
"It's been very hard for the 10-year yield to break under 4.18% and stick this year. The only way we did this was in the aftermath of the Godzilla tariffs, when stocks entered a brief bear market. So until we are able to do this, I wouldn't get too excited about rates going much lower. Of course, mortgage rates are already near year-to-date lows because mortgage spreads are better in 2025 than in the past two years."
Job openings were little changed at 7.2 million in July, with hires and total separations unchanged at 5.3 million. Within separations, quits were 3.2 million and layoffs and discharges were 1.8 million, all unchanged. The Federal Reserve prioritizes reducing wage growth toward about 3% and views more unemployed Americans than job openings as reassuring for disinflation. Job openings have fallen from nearly 12 million after the COVID recession to roughly 7.2 million. Key reports this week include ADP, initial jobless claims, and the BLS nonfarm payrolls on Friday. The 10-year Treasury yield slipped but remains hard to break below 4.18%.
Read at www.housingwire.com
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