US: Trump Considers Calling For GOP Convention Prior To Midterms

The JOLTS report for June was soft across the board. The ratio of openings to unemployed continued to show signs of stabilization rather than deterioration, broadly holding levels seen for the past year, but hire rates in particular cooled further. The latter leaves greater susceptibility to any slowdown in economic activity.  

• Job openings were a little lower than expected in June at 7437k (sa, cons 7,500k) after an unrevised 7769k in May.  
• That decline on the month meant that the ratio of openings to unemployed was broadly unchanged at 1.06 after an unrevised 1.07 despite the already known 222k decline in unemployment in last month’s payrolls report.
• It remains close to the recent low of 1.02 in March and represents continued recent stability rather than any further moderation, having averaged 1.07 since Jun 2024. For context, it averaged 1.2 in 2019 and 1.0 in 2017-18.
• The quit rate eased to 1.97% from a marginally downward revised 2.049% that was exacerbated by rounding having initially reported at 2.06%. This is the lowest quit rate since December after some surprise increases which helped see a recent high of 2.10% in March.
• There’s a similar story for the private sector quits rate, at 2.19% after 2.27% for also its lowest since December. Whilst a small portion of the labor market, the federal quit rate dipped back to 0.5% but remains unchanged from the 2024 average prior to DOGE efforts.
• Hire rates are the most dovish aspect of the release in our minds, falling to 3.26% from 3.42% (revised down from 3.45%). This is the lowest since Jun 2024, Apr 2020 and before that 2013, whilst it compares with pre-pandemic averages in the 3.8-3.9% range for other periods of labor market tightness.
• Fed Chair Powell has in the past warned that whilst the labor market remains resilient, any downturn could see a faster deterioration in the labor market considering the already low nature of hire rates. 

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