Payden & Rygel: US job openings and unemployment - possible soft landing?

Payden & Rygel: US job openings and unemployment - possible soft landing?

July 19, 2024

United States Labor force Recession (threat)
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This week, Federal Reserve Governor Waller reflected on his argument for a 'soft landing' back from August 2022. At the time, Governor Waller argued that declining job vacancies were not necessarily a precursor to rising unemployment, despite what the historical relationship between the two - the Beveridge Curve - suggested.

Despite all the chatter, the job vacancy rate has dropped from 7.4% to 4.9% close to the pre-pandemic average, with the unemployment rate only rising a mere 0.5 percentage points. If inflation moderates in the second half of 2024, the Federal Open Market Committee (FOMC) can reduce rates in the 'not-too distant-future' and 'may well be able to achieve the soft landing', per Waller this week. Sometimes, it's good news for the consensus economic wisdom to be proven wrong.

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