Just before Fed interest rate decision, big rise in job openings results in second thoughts

Just before Fed interest rate decision, big rise in job openings results in second thoughts

The JOLTS survey from the Department of Labor showed a big jump in job openings in September. Which raised market worries that the Fed will raise interest rates tomorrow, November 2, by a hefty 75 basis points and signal that it is farther away from a pivot toward lowering interest rates than this recent rally has hoped. The Job Openings and Labor Turnover Survey showed that the number of available positions climbed to 10.7 million in September from a revised 10.3 million in August. Economists surveyed by Bloomberg were looking for a drop to 9.8 million openings.

May jobs comes in stronger than expected; that should put the kibosh on thoughts of a Fed pause in September

Friday’s jobs report for November is even more important than usual for stocks

Right now the stock and bond markets can’t decide if the Omicron Variant will crush the global economy badly enough to lead the Federal Reserve to delay its timetable for raising interest rates or if the U.S. economy is so strong and inflation so persistent that Jerome Powell and company will be pushed to accelerate the Fed’s tightening. Which makes Friday’s jobs report for November even more important than usual since it might provide the tipping data to send the Fed’s decision one way or the other. Right now economists at Argus forecast that the economy added 550,000 new jobs in November. That would be an increase from the 531,000 jobs created in October and from the 32,000 created in August.

Saturday Night Quarterback (on a Sunday) says, For the week ahead expect…

Saturday Night Quarterback (on a Sunday) says, For the week ahead expect…

On Friday, after the strong July jobs report, stocks said that the “re-opening” economy is going strong. That the Federal Reserve would see the July jobs report as a reason to raise interest rates. That inflation is likely to strengthen. On those conclusions the yield on the 10-year Treasury rose (7 basis points) to 1.30%. Bank stocks, which move up when interest rates do, climbed. “Re-opening” stocks such as Macy’s (M) gained with Macy’s shares up 6.24% on the day. Defensive stocks such as Chipotle (CMG), and PetMed Express (PETS) fell 0.68% and 0.82%, respectively. And tech stocks, the recent favorite sector when the economy looks shaky, fell with the NASDAQ 100 down 0.48%. What we’ll see next week if whether these convictions hold–and whether or not investors start to question Friday’s certainty.

May jobs comes in stronger than expected; that should put the kibosh on thoughts of a Fed pause in September

Stocks on pause as market waits for Friday’s May jobs numbers

The last time the government reported monthly jobs numbers, investors and traders faced a big surprise. In April the U.S. economy added only 266,000 jobs. That was well below expectations for the addition of 1 million jobs in the month. Waiting for the May jobs report before the open on Friday Wall Street is hoping for a return to something like the run of months before April of 900,000+ plus. I suspect that Wall Street economists would be happy with any number strong enough to suggest that the April plunge was a fluke. Economists surveyed by Bloomberg are projecting that the economy added 650,000 jobs in May. But after last month’s failure to predict the drop fresh in investors’ minds, no one is rushing to stake out a position either long or short ahead of the data. Which is one reason why the Standard & Poor’s 500 fell by all of 0.05% today

Saturday Night Quarterback (on a Sunday) says, For the week ahead expect…

Saturday Night Quarterback (on a Sunday) says, For the week ahead expect…

This week Wall Street analysts and economists, professional money managers, and individual investors and traders will “re-calculate” their expectations about the economy for the remainder of 2021. Friday’s surprisingly small addition of 266,000 jobs to the U.S. economy–instead of the 1 million projected by economists–will lead to a revisions in assumptions about inflation, interest rates, and economic growth for the rest of 2021.