Markets get their first look at the labor market today as Jobs Week begins with the release of the closely watched JOLTS report.
Why it matters: The labor market has remained stronger than expected despite elevated interest rates, and this week’s data could shape expectations for the Federal Reserve’s next move.
- Economists expect job openings to edge down to 7.35 million in June. While that would mark the lowest reading in three months, it would still rank as the third-highest level of the past 17 months, underscoring the labor market’s surprising resilience.
Caution: Workers, however, appear to be growing more cautious. Quits are expected to decline to 3.05 million, which would be the lowest level in seven months and suggest fewer employees are confident enough to voluntarily leave their jobs.
Good signs: There are also signs that hiring plans may be improving. The Wall Street Journal reported last week that “a shift is emerging across industries,” with companies including railroad operator CSX and Google parent Alphabet telling investors they plan to increase hiring to meet growth objectives and capitalize on emerging technologies.
- The Journal described the trend as a “…reversal from the prevailing corporate messaging during much of the AI era.”
- Still, investors will likely reserve judgment until Friday’s employment report. Economists expect the U.S. economy added just 80,000 jobs in July, a pace that would represent another month of relatively modest hiring.
The bottom line: Early signs suggest the labor market remains on solid footing, but markets will be looking for this week’s data to confirm that hiring is keeping pace with the growing optimism expressed by corporate America.