The US Job Opening and Labor Turnover Survey (JOLTS) saw job openings fall to 8.06 million in April from 8.355 million in March, marking the lowest level since February 2021. Piper Sandler Chief funding Strategist Michael Kantrowitz joins sector Domination to discuss the state of the labor sector and what it could signal for the Federal Reserve’s borrowing charge rate move.
“When you look at the broader jobs data from everything from nonfarm payrolls to the unemployment rate to temp employment, hiring plans, quit rates, etc., there’s been this underlying slowdown going on for about a year. It’s broadening, so there’s more data points slowing than are strengthening,” Kantrowitz explains. He adds that this is “good news” for equities as it helps quell inflation fears, explaining, “I think we’ve got a ways to go before we have to worry about a real hard landing taking down equities broadly.”
Kantrowitz notes that the negative correlation between rates and shares will continue until inflation concerns improve. He expects two rate cuts by the end of the year, and points to economic factors like low oil prices, high fiscal spending, and a flexible labor sector that are continuing to help offset the impact of higher borrowing charge rates.
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