Latest / Markets with Megan: A Quick Financial Markets Update / Fewer Job Openings: Should You Worry? | S2E008 | 02-04-25

Transcript

Fewer Job Openings: Should You Worry? | S2E008 | 02-04-25 · Markets with Megan: A Quick Financial Markets Update

• 0:00
  Megan Horneman: Although the tariff situation is taking really prime stage here, when it comes to moving the markets, we can't forget about the economic data, especially on such an important week that we have.
• 0:10
  Megan Horneman: This week.
• 0:11
  Megan Horneman: It's Tuesday, february 4th, and this is Markets with Megan.
• 0:14
  Megan Horneman: This week we'll get a lot of information on the employment situation.
• 0:19
  Megan Horneman: We got data this morning on the JOLTS job openings report.
• 0:23
  Megan Horneman: We saw that for December, job openings were much weaker than expected.
• 0:28
  Megan Horneman: Actually, even though the November numbers were revised higher, the actual reading came in to the lowest level in three months.
• 0:35
  Megan Horneman: It was led by professional business services, healthcare and financial job openings and it was below, at 7.6 million, below every economist that Bloomberg surveyed except for one, so showing that job openings are weakening.
• 0:51
  Megan Horneman: Now let's put that in perspective to the amount of people that are unemployed out there.
• 0:56
  Megan Horneman: This is where we can measure the tightness in the labor market, and this is something the Federal Reserve is looking at, because if you have a tight labor market meaning that there's a lot more jobs out there than there are people looking for jobs, then you can see wages increase and that's an inflation indicator.
• 1:12
  Megan Horneman: So the Fed pays close attention to these data points.
• 1:15
  Megan Horneman: So let's look at the quits rate.
• 1:17
  Megan Horneman: This is the amount of people that are voluntarily leaving their job.
• 1:20
  Megan Horneman: We saw this significantly high after the pandemic, but we're seeing that unchanged now.
• 1:27
  Megan Horneman: So this is showing that people are less inclined to quit their job without having other job prospects in line.
• 1:33
  Megan Horneman: When you look at the layoffs rate, which is something that the Fed's going to pay close attention to, this is going to take the amount of job openings out there that there are per unemployed Americans.
• 1:45
  Megan Horneman: We've seen that this has stayed unchanged for six months now at 1.1%.
• 1:50
  Megan Horneman: This is below the 10-year average that we had leading up to the pandemic, so this is showing that the employment market is starting to come in better equilibrium.
• 2:00
  Megan Horneman: This is what the Fed has wanted to see.
• 2:02
  Megan Horneman: He's wanted to see the pace of job openings come down without a significant increase in the unemployment rate.
• 2:09
  Megan Horneman: Now, just to put this in perspective during the peak we saw this there were two job openings for every one person unemployed, so that was a very tight labor market.
• 2:19
  Megan Horneman: It's good news for the Fed that we're starting to see this come back into equilibrium.
• 2:24
  Megan Horneman: Now.
• 2:24
  Megan Horneman: We'll be back this week.
• 2:25
  Megan Horneman: There's a lot of stuff going on in the markets and we realize that the markets are moving very fast.
• 2:29
  Megan Horneman: We have the tariff situation.
• 2:31
  Megan Horneman: It's delayed now with Canada and Mexico, but we saw the retaliatory tariffs come out this morning from China, so we expect volatility to remain very heightened in the next couple weeks.
• 2:42
  Megan Horneman: We caution investors don't make emotional decisions on day to day moves in the market.
• 2:51
  Megan Horneman: Yesterday was a prime example.
• 2:52
  Megan Horneman: The market was significantly lower to start the day, only to reverse the majority of those losses for the day, and today we're basically flat, even with those China retaliatory tariffs.
• 2:59
  Megan Horneman: That's because it's still way too early to gauge what impact this can have on the economy.
• 3:05
  Megan Horneman: Now, looking forward for the rest of this week again, we'll have ISM services tomorrow.
• 3:10
  Megan Horneman: This is important because the service indicator is where we spend the majority of our money and it has been one of the areas that inflation's been stubborn here in the US.
• 3:21
  Megan Horneman: And then we'll round it out the end of the week with the payroll report and this will be very important to take a look at.
• 3:25
  Megan Horneman: It's after the Fed meeting, but the Fed's looking at this for their next meeting and what to do with interest rates.
• 3:30
  Megan Horneman: That's all we have today.
• 3:32
  Megan Horneman: If you like this podcast, please subscribe, hit that alarm bell, send it to friends or colleagues and then, as always, if you want any history of our podcast, you can go to marketswithmegan.
• 3:41
  Megan Horneman: fm.
• 3:42
  Megan Horneman: Thank you.