Pro Perspectives 6/4/24





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June 04, 2024

As we discussed yesterday, the interest rate easing cycle is underway in the advanced economies (excluding Japan).  And we should see more evidence of that this week (in Europe, and likely Canada).
As for the Fed, Jerome Powell has told us they are watching the job market "carefully" for "cracks" as a condition to start the easing cycle.
And this week, we get jobs data. 
It started this morning with the report on job openings.
Let's talk about why this report is of particular interest. 
If we look back to March 2022, when the Fed started the tightening cycle, they immediately made it known that they wanted to "bring demand down," and the sacrificial lamb would be jobs.
And Powell incessantly cited the job openings-to-job seekers ratio.  At that time, there were two open jobs for every one job seeker.  And he told us they intended to bring the ratio down one-to-one.
So, what was today's number?
The job openings fell to the lowest level since February of 2021.
That brings the ratio down to 1.24 job openings for every one job seeker.  It's not one-to-one, but it's the lowest ratio since mid-2021.
More importantly, as you can see in the chart, that's in-line with pre-covid (2018-2019) levels