We are not yet putting a lot of weight on the employment numbers but the September and October reports will be importnt.
On the JOLTS report, help-wanted/position available ads are just too ephemeral for betting real money. Years ago, when companies had to spend money in classified advertising there was a tendency to pull ads when positions were filled, making the numbers more timely.
Now we see the notices floating around until HR gets tired of telling people there is no longer a position available and tracks down where the applicants are seeing the openings.
From Marc to Market:
Overview: The US dollar enjoys a firmer bias against the major currencies ahead of the July employment data. Emerging market currencies are mixed. Asian currencies are generally firm while central Europe is a bit softer. Some detect a relaxation in tensions around Taiwan, though China’s aerial harassment continues. Taiwanese shares jumped 2.25% to lead the region that saw China’s CSI 300 rally over 1%. Europe’s Stoxx 600 is giving back yesterday’s 0.2% gain, even though Germany, France, and Spain reported stronger than expected June industrial output figures. US futures are narrowly mixed. The 10-year US Treasury yield is around 2.69%, flattish, while European yields are slightly firmer.
Gold approached $1800 but has been turned back. It is near $1785 near midday in Europe as it solidifies its third weekly gain. September WTI traded below its 200-day moving average (~$88.80) for the first time since mid-March, while Brent saw its lowest level since the Russian invasion of Ukraine. Prices have steadied so far today. US natgas is edging lower after falling 1.75% yesterday. It is about 1.3% lower on the week. Europe’s natgas benchmark is off 1%, roughly the same as the past two sessions, which leaves it a little higher on the week. Iron ore snapped a five-day slide of around 11% with a 3.2% gain today. September copper is edging higher for the second day. It fell for the first three sessions this week to snap a six-day rally. September wheat gained 2.45% yesterday, its first advance in five sessions. However, it is off 1% today....
*****
...America
There is no doubt that the US labor market momentum is slowing. The four-week moving average of weekly jobless claims has risen to 254k, up from the 170k low nearly four months ago. They averaged 238k at the end of 2019. Continuing claims have risen to 1.416 mln, which is still an historically low number. At the end of 2019, for example, continuing claims were slightly below 1.9 mln. Alternatively, consider that the four-week moving average is 1.375 mln and it bottomed in mid-June at 1.314 mln. Non-farm payroll growth is also slowing and the median in Bloomberg's survey is for a 250k increase. That would be the lowest since December 2022 when the US reported a 115k decline in nonfarm payrolls. The risk seems to be on the downside. The JOLTS showed a large fall in job openings. The weekly jobs claims rose during the survey week. The ISM manufacturing and services survey showed continued contraction in employment. Economists have been over-estimating many important economic data points. Given the normal volatility of the report, a rule of thumb is that 100k deviation from expectations is the threshold of importance.....
....MUCH MORE
