The latest data on job openings in the United States has sparked concerns about the strength of the labor market, coming ahead of Friday’s crucial non-farm payrolls report. The Bureau of Labor Statistics’ Job Openings and Labor Turnover Survey (JOLTS) revealed 7.67 million job openings in July, a decrease from June’s 7.9 million and below the consensus estimate of 8.1 million. This decline triggered a sell-off in early trading, reflecting traders’ worries about a potential weakening of the labor market and its implications for the broader economy.
Prominent economist Peter Schiff expressed skepticism about the perceived strength of the labor market, stating that the “illusion of a strong labor market is fading faster than #Kamala’s convention, media-manipulated popularity spike.” He pointed out that the July job openings figure was the lowest since January 2021, with the previous month’s number also being revised downward.
While acknowledging the decline in job openings, fund manager Louis Navellier offered a more nuanced perspective. He noted that despite the July setback, job openings remained significantly higher than unemployment numbers compared to long-term averages. “While trending down, ‘excess job openings’ started from an unprecedented high level. It’s still not a recession signal,” he stated.
The upcoming August non-farm payrolls report, scheduled for release on Friday, is expected to show a decent gain of 161,000 jobs, following a more modest increase of 114,000 in June. The unemployment rate is projected to edge down slightly to 4.2%. The labor market has held up relatively well despite the Federal Reserve’s aggressive rate hikes. However, recent revisions have adjusted job gains over the past year downward by 818,000, casting a shadow over the overall picture.
Mike Wilson of Morgan Stanley anticipates stronger-than-expected non-farm payroll gains of 185,000 for August. The upcoming report will provide crucial insights into the direction of the labor market and the broader economic outlook, amidst ongoing concerns about potential recessionary pressures.
