Sep Bostajani’s Post

LM tightness index update Over the past two years, our Labor Market Tightness Index has shown a gradual decrease, indicating that the labor market's current tightness is back to 2019 levels. It's important to recognize that 2019 was an exceptional year, marking the tightest labor market since the late 1990s. Inflation implications: It is becoming more evident that the fundamental factors driving inflation—such as economic and job growth, tightness in the labor market, rents, and inflation expectations—are not aligning with a further reduction to a 2% inflation rate. The notion of a "no landing," where inflation remains well above the Fed’s target rate, has become increasingly plausible. Some economists predicted that while it should be relatively easy for the Fed to lower inflation to about 3%, lowering it all the way to 2%, ‘the last mile’, will prove to be more difficult. This is indeed the case. #labormarkets #inflation #federalreserve #recruitment

𝐌𝐢𝐱𝐞𝐝 𝐟𝐞𝐞𝐥𝐢𝐧𝐠𝐬 𝐟𝐨𝐫 𝐏𝐨𝐰𝐞𝐥𝐥 𝐚𝐧𝐝 𝐭𝐡𝐞 𝐧𝐞𝐱𝐭 𝐅𝐎𝐌𝐂 𝐦𝐞𝐞𝐭𝐢𝐧𝐠 𝐚𝐬 𝐭𝐡𝐞 𝐔𝐒 𝐥𝐚𝐛𝐨𝐮𝐫 𝐦𝐚𝐫𝐤𝐞𝐭 𝐡𝐚𝐬 𝐣𝐮𝐬𝐭 𝐦𝐚𝐝𝐞 𝐭𝐡𝐞𝐢𝐫 𝐣𝐨𝐛 𝐚 𝐥𝐢𝐭𝐭𝐥𝐞 𝐛𝐢𝐭 𝐭𝐫𝐢𝐜𝐤𝐲, 𝐚𝐧𝐝 𝐡𝐞𝐫𝐞 𝐢𝐬 𝐰𝐡𝐲** 𝐓𝐡𝐞 𝐠𝐨𝐨𝐝 𝐩𝐚𝐫𝐭: The US labour market added #227k jobs in November, beating market expectations of 200k and offsetting the disappointing number of 12k in October data points. 𝐓𝐫𝐢𝐜𝐤𝐲 𝐏𝐚𝐫𝐭: The Unemployment rate came out higher at 4.2% although it is in line with the consensus. Wages jumped on both m/m and YoY, 0.4% m/m and 4.0% YoY, and both data points came out higher than consensus. Inflation showing sticky exposure at 2.6% and with a possible higher number for November release keeps the FED in a tight space to either #pause rate cut or give a new pathway for finding a #Neutral_rate on the 18th of this month. 𝐁𝐨𝐭𝐭𝐥𝐞 𝐍𝐞𝐜𝐤: Should the market expect a dialled back from FED with the ongoing rate cut due to sticky inflation and strong wages and job growth? Or should they keep cutting rates to support the Unemployment sector, especially for the private sector? Powell will have a lot of work to do to convince the market with their monetary policy model. 𝐏𝐒: 𝐈𝐭'𝐬 𝐚𝐧 𝐞𝐱𝐜𝐢𝐭𝐢𝐧𝐠 𝐭𝐢𝐦𝐞 𝐚𝐡𝐞𝐚𝐝 𝐟𝐨𝐫 𝐭𝐡𝐞 𝐟𝐢𝐧𝐚𝐧𝐜𝐢𝐚𝐥 𝐦𝐚𝐫𝐤𝐞𝐭 𝐚𝐬 𝐞𝐱𝐩𝐞𝐜𝐭 𝐨𝐭𝐡𝐞𝐫 𝐦𝐨𝐧𝐞𝐭𝐚𝐫𝐲 𝐩𝐨𝐥𝐢𝐜𝐲 𝐩𝐫𝐨𝐣𝐞𝐜𝐭𝐢𝐨𝐧𝐬 𝐟𝐫𝐨𝐦 𝐨𝐭𝐡𝐞𝐫 𝐂𝐞𝐧𝐭𝐫𝐚𝐥 𝐁𝐚𝐧𝐤𝐬 𝐭𝐡𝐢𝐬 𝐦𝐨𝐧𝐭𝐡 Chart Source: BLS #GeorgeChigozieAnonyuo

Recent data from the U.S. Federal Reserve highlights a slowdown in economic activity and a softening labour market, supporting the likelihood of imminent rate cuts and a surge in global liquidity. The Fed's latest survey shows that while seven of its districts experienced some growth, five saw flat or declining activity. The unemployment rate hit a 2.5-year high, and wage growth has slowed. These developments align with the Fed's strategy to manage inflation and labour market conditions, suggesting potential rate cuts later this year. Read the full article here 👇

📈 Economic Update 📉 As reported by the US Bureau of Labor Statistics (BLS), the US job market showcased unexpected robustness in December, adding 256,000 jobs 📈, significantly exceeding expectations. This impressive growth brought the unemployment rate down to 4.1% 📉, challenging the Federal Reserve's earlier predictions of a slowing labour market. The recent trend of job gains contrasts sharply with the Federal Reserve's previous forecasts, which had anticipated a downturn. In response to what was perceived as slowing job growth and manageable inflation 🏦, the Fed initiated rate cuts in September 2024, reducing rates by 50bps. However, the recent surge in job growth coupled with rising inflation 💹 suggests that these rate cuts may need reconsideration, potentially leading to increased rates instead. The yield on the 10-year note rose by 9bps on Friday to 4.77% 📊, reflecting investor anticipation of future interest rate hikes. Under the leadership of Powell, the Federal Reserve appears somewhat misaligned with market sentiment, contributing to increased volatility 📉📈. There's now a 44% probability that there will be no rate cuts through June 2025, marking a significant shift from earlier expectations of multiple cuts. #ConnectWithBPAM #BPAM #iBPAM #BondStream #USJobMarket #FederalReserve #InterestRates #EconomicGrowth #InflationTrends #FinancialMarkets #MonetaryPolicy #JobGains #MarketVolatility

WAGES & INFLATION – June #ChallengerReport media coverage by Martin Baccardax with TheStreet: Annual wage gains last month were the slowest in three years, adding to recent data showing cooling inflation pressures. The June jobs report bolsters bets on an autumn Fed interest rate cut:

Check out this article from USA TODAY: Here's where the economy stands as the Fed makes its interest rate decision this week https://lnkd.in/ekAbvrRT

Exciting news for the job market: Inflation has dropped to 2.9%, the lowest rate since early 2021. This positive trend signals that we’re moving closer to the Federal Reserve’s 2% target. With this drop, we may see interest rates begin to lower, which could boost investment and hiring across industries. For businesses, this stability provides a promising environment for growth and talent acquisition. Job seekers, keep an eye out for new opportunities as companies may ramp up hiring in response to a more favorable economic outlook. Let’s stay optimistic and strategic as we navigate these positive economic changes! #Economy #Inflation #HiringTrends #JobMarket #GrowthOpportunities #FederalReserve #USLaborMarket #TalentAcquisition #EmploymentOpportunities https://lnkd.in/g7juUSAm

𝐅𝐫𝐢𝐝𝐚𝐲 𝐔𝐩𝐝𝐚𝐭𝐞: 𝐉𝐨𝐛𝐬 𝐑𝐞𝐩𝐨𝐫𝐭 𝐒𝐡𝐨𝐜𝐤𝐬 𝐌𝐚𝐫𝐤𝐞𝐭𝐬 𝐰𝐢𝐭𝐡 𝐒𝐭𝐫𝐨𝐧𝐠 𝐆𝐚𝐢𝐧𝐬, 𝐮𝐧𝐞𝐦𝐩𝐥𝐨𝐲𝐦𝐞𝐧𝐭 𝐟𝐚𝐥𝐥𝐬 𝐭𝐨 𝟒.𝟏% Today’s news reveals a labor market that continues to outperform expectations. 👉 𝐉𝐨𝐛𝐬 𝐑𝐞𝐩𝐨𝐫𝐭 𝐒𝐡𝐨𝐜𝐤𝐞𝐫: In a surprising turn, the U.S. economy added 254,000 jobs in September, far surpassing economists’ expectations of 150,000. This robust growth shows the job market remains strong, despite efforts by the Federal Reserve to cool down the economy through rate hikes. The unemployment rate also ticked down to 4.1%, from 4.2% in August, further indicating resilience in the labor market. 👉 𝐖𝐚𝐠𝐞 𝐆𝐫𝐨𝐰𝐭𝐡 𝐒𝐭𝐚𝐲𝐬 𝐒𝐭𝐞𝐚𝐝𝐲: Wage growth continues to be a key factor in assessing inflation pressures. In September, wages increased by 4% year over year, a slight uptick from August’s 3.9%. On a monthly basis, wages increased by 0.4%, keeping pace with last month’s reading. While wage growth is important for workers, it may keep inflation higher, complicating the Fed’s decisions. 𝐖𝐡𝐚𝐭 𝐃𝐨𝐞𝐬 𝐓𝐡𝐢𝐬 𝐌𝐞𝐚𝐧?: The stronger-than-expected jobs report may push the Federal Reserve to pause or slow down future rate cuts. While a weaker labor market would normally lead to more aggressive rate cuts, today’s data suggests the Fed might hold off on additional large cuts for now. #LaborMarketUpdate #EconomicGrowth #FedWatch

The 3-month span diffusion index for employment is an indicator that is not often discussed; however, my statistical analyses, which I will present in today’s analysis, suggest that it is important to consider when assessing labor market conditions. In August, the diffusion index dropped to 49.8, its lowest level since June 2020, marking the third consecutive monthly decline. This low level, combined with the continued decrease over the past three months, supports the narrative that there is significant downward momentum in the labor market. When we combine this downward momentum with the fact that the recent PCE report indicated similar momentum in inflation data, we can conclude that the Federal Reserve should continue lowering the federal funds rate. In fact, another 50 basis point cut may be more appropriate, given that inflation appears to be under control, while it remains uncertain whether the labor market's downward momentum will fade. The low diffusion index suggests that further weakening in the labor market is likely in the coming months. As a result, the Fed may consider another 50 basis point cut at one of the two remaining FOMC meetings in 2024.