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MNI is the leading provider
of intelligence and analysis on the Global Fixed Income, Foreign Exchange and Energy markets. We use an innovative combination of real-time analysis, deep fundamental research and journalism to provide unique and actionable insights for traders and investors. Our "All signal, no noise" approach drives an intelligence service that is succinct and timely, which is highly regarded by our time constrained client base.Our Head Office is in London with offices in Chicago, Washington and Beijing, as well as an on the ground presence in other major financial centres across the world.
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The August ratio of openings to unemployed (1.67) compares with 1.97 in July and the 1.99 peak in March, when the Fed started raising rates, and when Chair Powell remarked that the ratio marked an "unhealthy" job market.
- The one-month 0.3pp drop in the ratio is the biggest in the series history with the exceptions of March and April 2020. Whether the speed decline can continue is doubtful, but at this pace, the ratio would be back to pre-COVID levels (1.2) by October.
- Even declines at one-third of August's rate, by 0.1pp per month, would be enough to get the ratio closer to the 1.2 area by early 2023, and give the FOMC one less reason to tighten beyond what it's already signalled.
- The latest drop in the ratio wasn't without an increase in unemployment though, up 340k with the u/e rate up 0.2pts to 3.65% in August, but it still might be seen as a first step towards the Fed’s hope of being able to trim vacancies without unduly weighing on unemployment.
- The fact it’s only a first step is evidenced further by the private sector quits rate holding at 3.0%, down from highs of 3.3% but still notably higher than the 2.5% averaged in prior labour market peaks.
Why MNI
MNI is the leading provider
of intelligence and analysis on the Global Fixed Income, Foreign Exchange and Energy markets. We use an innovative combination of real-time analysis, deep fundamental research and journalism to provide unique and actionable insights for traders and investors. Our "All signal, no noise" approach drives an intelligence service that is succinct and timely, which is highly regarded by our time constrained client base.Our Head Office is in London with offices in Chicago, Washington and Beijing, as well as an on the ground presence in other major financial centres across the world.
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