It’s hard to imagine a 7-day stretch in which the job data could possibly have provided more convincing evidence of a soft landing and a job market in near-perfect balance than what we’ve seen since last week:
- Job openings in June fell to 9.58M while quits dropped to 3.77M.
- The rise in the Employment Cost Index (1%) was below expectations and lower than Q1 as June’s YoY rate fell to 4.5%.
- Unemployment claims dropped yet again.
- And even with Q1’s upward GDP revision, core PCE inflation slowed to 4.1% while the personal-consumption expenditures price index rose just 3% in June relative to the prior year (down from a 3.8% rise in May) - the lowest increase in two years.
- And, of course, unemployment hasn’t budged from record lows
We truly are, as Austin Goolsbee recently noted, strolling down a ‘Golden Path.’
So to answer Bloomberg’s Question of the Day (image above), the answer is an emphatic ‘YES.’ Of course, the long-dismissed, oft-derided soft landing has been our base case since we first saw this golden path come into view nearly a year ago. We even noted back in February that it might be the case that the plane had already landed.
But as we’ve also noted repeatedly, there is a material difference between landing gently and safely disembarking, unharmed, from the aircraft. The onus for that most critical step rests solely with the Fed and what they do with rates in the coming months. And unfortunately, clarity (and consensus) among members of the FOMC couldn’t be less certain.
For whatever it’s worth, with the guidance provided by our accurate, predictive, and real-time labor market data generated by hundreds of millions of job openings sourced every day directly from company websites around the world, we’d urge patience over the next two months and advise sitting tight in September.
Based on our June data, job growth will come in better than expected in July, but with the decline in job openings in July, we expect job growth in August to drop from July’s levels.
Looking at our data for July, total job openings in the U.S. fell 2.1%, new openings dropped 8.0%, and job openings removed from company websites rose 5.5%.