US Job Openings, Quits and Hiring Ease as Labor Market Cools
US job openings eased in November to the lowest level since early 2021, fewer workers voluntarily quit their positions and the number of hires fell, adding to evidence of cooling labor demand.
Vacancies decreased to 8.79 million from an upwardly revised 8.85 million in the prior month, the Bureau of Labor Statistics Job Openings and Labor Turnover Survey, known as JOLTS, showed Wednesday. Hiring declined to the lowest level since April 2020. Layoffs edged lower. (…)
The so-called quits rate, which measures people who voluntary leave their jobs as a share of total employment, ticked down to the lowest since September 2020. A moderation in quits may imply Americans are feeling less confident in their ability to find other jobs in the current market or to get new jobs that are better paid. (…)
The ratio of openings to unemployed people held at 1.4. The figure has eased substantially over the past year, indicating labor supply and demand has moved into better balance. At its peak in 2022, the ratio was 2 to 1. (…)
The BLS revised the October openings by 119k (+5.6%). Job Postings on Indeed have levelled off through December 29.
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Fed Minutes Suggest Hikes Are Over but Offer No Timetable on Cuts Some officials highlighted the risks of “an overly restrictive stance” on interest rates.
(…) Some policymakers revealed unease about leaving rates too high for too long. They highlighted “the downside risks to the economy that would be associated with an overly restrictive stance,” the minutes said. They flagged the risk that a slowdown in the labor market could “transition quickly from a gradual easing to a more abrupt downshift in conditions.”
At the same time, others thought “circumstances might warrant keeping the target rate at its current value for longer than they currently anticipated,” according to the minutes. That could be necessary if inflation settled out too high above the Fed’s 2% target, said Richmond Fed President Tom Barkin in a speech Wednesday. (…)
Investors expect the central bank to begin lowering rates at its second scheduled policy meeting this year, in March. The Fed’s next meeting is Jan. 30-31. (…)
Still, the minutes suggest that officials could become nervous if markets rallied too much by easing financial conditions in a way that could make it harder to slow the economy and keep inflation moving down. (…)
- The FT’s headline: Fed officials said rates could remain high ‘for some time’ December meeting minutes appear to pour cold water on prospect for cuts to start in March
- At December meeting, some Fed officials mulled end to balance sheet cuts
Some Federal Reserve officials are ready to talk about what it would take for the central bank to stop the ongoing shrinkage of its massive holdings of cash and bonds, opening the door to a notable shift in central bank monetary policy, according to meeting minutes for the Fed’s Dec. 12-13 policy meeting, released on Wednesday.
At the gathering last month, “several participants remarked that the Committee’s balance sheet plans indicated that it would slow and then stop the decline in the size of the balance sheet when reserve balances are somewhat above the level judged consistent with ample reserves,” the minutes said.
“These participants suggested that it would be appropriate for the Committee to begin to discuss the technical factors that would guide a decision to slow the pace of runoff well before such a decision was reached in order to provide appropriate advance notice to the public,” the Fed document said.
The policymakers were taking on a process that has complemented the Fed’s aggressive rate hike cycle, and that is its ongoing contraction of just shy of $100 billion per month in the overall size of its balance sheet. The Fed is allowing Treasury and mortgage bonds it owns to mature and not be replaced, and in doing so, it has reduced its balance sheet by just over $1 trillion, to $7.764 trillion on Dec. 27. (…)
Many in markets have been eying the second or third quarter this year as an end point for the wind down.
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Vehicles Sales increase to 15.83 million SAAR in December; Up 17% YoY
Wards Auto released their estimate of light vehicle sales for December: December U.S. Light-Vehicle Sales Hit 5-Month High; Entire 2023 Totals 4-Year Best 15.5 Million (pay site).
Labor-related plant shutdowns in the U.S. that covered the latter half of September and most of October negatively impacted deliveries in November. Combined sales of the vehicles impacted by shutdowns fell 15% year-over-year in November. If those vehicles had matched year-ago results, sales would have totaled a 15.9 million-unit SAAR. While CUVs accounted for over half the market for the second time ever, vehicles impacted by the strikes were largely behind weakness in pickups, SUVs and vans.
Sales in December were up 3.3% from November, and up 16.8% from December 2022.
China Fiscal Spending Will Rise in 2024, Finance Chief Says Minister’s remarks add to pledges for more policy support
(…) “We will make sure the overall size of fiscal spending increases to play a better role stimulating domestic demand,” Finance Minister Lan Fo’an said in an interview published Thursday by the People’s Daily, the Communist Party’s mouthpiece.
Lan’s remarks add to pledges from top Chinese officials who have stressed the need to strengthen fiscal support for the economy this year. Those vows have raised expectations that Beijing may set an ambitious economic growth target during a year in which it still faces several challenges to growth, including from an ongoing property slump and still-weak confidence among businesses and consumers.
Lan also told the newspaper that the size of the country’s budget deficit will be maintained at a “certain level” in 2024, and added that authorities will continue to set an “appropriate” quota for new special local government bonds, a key source of infrastructure investment. That way, overall government spending will increase and “play a better role stimulating domestic demand.”
To help cash-strapped local authorities meet basic spending needs, Lan said the central government would continue transferring funds to them, with poorer areas receiving preference. He also said officials would roll out some tax cuts focusing on support for technological innovation and manufacturing development. (…)
The most recently available official data showed a broad measure of government spending falling 0.5% through the first 11 months of last year compared to 2022. That put Beijing’s initial goal of boosting that so-called augmented expenditure by about 6% for the year far beyond reach.
Some economists expect the official budget deficit this year to be similar, if not slightly bigger, than last year’s. Beijing set that deficit-to-gross domestic product ratio at 3% last March, but made a rare mid-year budget revision to 3.8% by issuing an additional 1 trillion yuan ($140 billion) of sovereign debt for disaster relief and construction.
Lan described the government’s debt ratio in the interview as being “in a reasonable range,” adding that officials have been “appropriately expanding spending and meeting realistic needs, while saving room for tackling potential risks and challenges in the future.” (…)
- China’s LGFVs Must Repay a Record $651 Billion of Bonds in 2024 Beijing has taken steps in recent months to contain debt risks
(…) That’s the highest amount on record, and is roughly 13% more than what came due last year. (…)
Last year, authorities introduced a program worth at least 1 trillion yuan allowing local governments to swap some LGFV debt for official bonds carrying lower interest rates, Bloomberg News reported in August.
While that plan covers a tiny fraction of the roughly $9 trillion in debt those companies are estimated to hold, the country saw a surge in early repayment of debt following the roll-out of that measure. (…)