Unemployment day - or unenjoyment day in some circles - is upon us. Typically the most boring trading day of the month especially outside the US as traders do nothing in anticipation of the number, see frantic activity in a short burst, and then go back to nothing

The intense focus on a single measure of employment, that will subsequently be revised 2 more times, and is fraught with adjustments and seasonality, always amazes me

Much like the network effects around a technology application, though, if everyone is intently focused, it will become more important than maybe it should be

I am not saying it is worthless, just that it is one of many looks at the labor market that we get, many in a more real-time fashion, that give us a full picture of the job market. I have put a few on the chart today but even these are not exhaustive

The white line today is the ratio of continuing claims to initial jobless claims. The idea here is how many people are longer term unemployed vs. those that lost their job but are able to more quickly find employment. Variations are also called a re-hired rate

The orange line is inverted and this is the Job Openings and Labor Turnover Survey or JOLTS. It tells us how many positions are unfilled in the market. It has been persistently high over 11mm but it has started to move lower. Still historically high but lower

The purple line, also inverted, is the ISM employment line. I focus a lot on ISM headline or new orders or prices paid. However, employment conditions are also a part of the survey. This measure has been persistently weaker than other measures for 2 years

The final measure is the unemployment rate. It is one of the many parts of the data we will get today and takes into account the number of people employed but also the labor force participation rate, which has been dropping as people exit the workforce

This rate has been the strongest piece of data we have on jobs but it has started to tick higher, following the JOLTS and jobless claims data. This may be the primary data point the FOMC is following as full employment is its mandate

The fuller picture, regardless of the data today, is that the labor market has been strong, maybe historically so, but is starting to soften. It is not nearly soft enough to see rate cuts, but might be such that rate hikes are no longer necessary

Is it strong enough that labor can and should continue to ask for wages? Now we get into Phillips Curve type of discussions & many think this theory has been debunked but there are clearly some on the FOMC that still believe in it

Those that think it has been debunked may be basing their view on 1980-2020 period when the pendulum was swinging in favor of capital and not the 1950-1980 period when it was swinging in favor of labor. Which period is 2023 more similar to?

Stay Vigilant

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