New and continuing claims miss, so the "labor market weakness" crowd that has been gathering all week on Wall Street will have something to talk about ahead of tomorrow's payrolls. Just remember that new claims are lower than they were four weeks ago (when they were already incredibly low).
What you’re not hearing about “labor market weakness” ahead of tomorrow’s jobs report
Thursday, June 6, 2024
The JOLTS report has set off false narratives that will make even a tepid jobs report a pleasant surprise.
Update to Strategic View
Since Tuesday’s JOLTS report, “labor market weakness” has been Wall Street’s watchword, with a jobs report coming tomorrow. The quits rate is falling, as it does during every recession – it is a perfect coincident indicator. But it has now been falling for two years, with no recession. Job openings have fallen by more than 4 million over two years, which on the face of it should indicate diminishing employment opportunities and labor market weakness. But over the same two years, payrolls have grown by almost 7 million. This is just like the two prior expansions when payrolls continued to rise long after opens had begun to fall. Payrolls didn’t fall until the expansion was over and the recession had begun. The “labor market weakness” meme would seem to be a set-up so that even a tepid jobs report tomorrow morning would be a pleasant surprise.