US job vacancies in July hit a nearly three-year low! Gold surged close to the $2500 mark
In July, job vacancies in the United States dropped to the lowest level since the beginning of 2021, while layoffs increased, leading to an increase in market expectations for a Fed rate cut. Job vacancies decreased from 7.91 million to 7.67 million, pushing up the price of gold to nearly $2500. Data indicates a slowdown in labor market demand, raising concerns about an economic recession, especially as the upcoming August employment data may further impact the Fed's monetary policy
US job vacancies in July fell to the lowest level since the beginning of 2021, while layoffs increased, consistent with other signs of slowing labor demand.
Data from the Job Openings and Labor Turnover Survey (JOLTS) released by the US Bureau of Labor Statistics on Wednesday showed that job vacancies in July fell from a revised 7.91 million in the previous month to 7.67 million. This figure was below market expectations.
Following the release of the report, gold saw a short-term rise, approaching the $2500 mark; gold US Treasury yields declined, and the S&P 500 index fell. The US 2-year/10-year Treasury yield curve turned positive for the second time since 2022.
After the data was released, Wall Street increased its bets on a Fed rate cut, with Fed rate futures indicating further monetary policy easing by the Fed in 2024.
Chris Larkin of Morgan Stanley E*Trade said, "The market may not be as nervous as it was a month ago, but they are still looking for evidence that the economy is not cooling too much. So far this week, they haven't received confirmation."
The decline in job vacancies is consistent with recent data indicating a slowdown in the labor market, which has raised concerns among Fed officials. Job growth is slowing, unemployment is rising, and job seekers are finding it increasingly difficult to find work, exacerbating concerns about a possible economic downturn.
Fed policymakers have made it clear that they do not want to see further cooling in the labor market and are expected to begin cutting rates at the next meeting in two weeks.
Following disappointing job data in July and significant wage cuts last year, Fed officials and market participants are closely watching the August job data to be released on Friday, especially if it turns out to be another weak report, the Fed may cut rates significantly. The market expects a slowdown in US business hiring and a decrease in the unemployment rate.
The JOLTS report also showed that layoffs rose to 1.76 million, the highest level since March 2023, with the leisure and hospitality industry seeing the most layoffs. Meanwhile, job openings in healthcare, state and local government, as well as trade and transportation sectors, all declined slightly