The Labor market data for June shows that the labor market is cooling, as the number of job openings reaches the lowest level since January 2021. However, there are currently 1.5 job openings per unemployed person in the US, a historically high number.
The data also shows layoffs haven't changed much, so employers are not letting employees go more than they did last year or last month. This shows that even though the job openings dropped and the labor market is cooling it still is not cool.
This cooling of the job market, if it is also reflected in the August unemployment data, would strengthen the argument for another pause instead of a hike in the Fed meeting on September 18-19. Also, the policymaker will have to consider other data released between now and the meeting such as the August CPI and second-quarter growth. Resilient growth data could push the Fed towards hiking, while low inflation would steer them toward a pause. However, it seems now the 'long and variable lags' of monetary policy are in effect and the rate hikes are felt through the job market.
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