The Jobs Market Is Starting to Talk. You Need to Listen.

The headline inflation numbers have been getting all the attention. But the labor market just sent a signal that may matter more.

Job openings fell to 7.08 million in August, down 256,000 from July. Workers are quitting at their lowest rate since April, which is the one number that tells you how confident employees are in their ability to find something better. When quit rates fall, it means workers feel stuck, not secure. A confident labor market does not produce a falling quit rate.

Here is where it gets interesting. The 10-year Treasury yield closed at 5.26%, while the 2-year sits at 4.89%, putting 41 basis points of spread between them. The PCE inflation gauge came in at 2.97% year over year in August. So the Fed’s policy rate target (3.75% to 4.0%) is sitting well below where the bond market is pricing long-term risk. Bond investors are pricing in something the Fed has not fully acknowledged yet. Oil closed at $92.30, up $1.88, adding another layer of cost pressure into an already sticky inflation picture.

Today’s ISM Manufacturing Index prints this morning, giving the first major look at October economic conditions.

When quit rates cool alongside a bond market demanding higher long-term yields, the economy is threading a needle. Workers losing bargaining power means consumer spending faces a real test at the exact moment borrowing costs are rising.

Sunday’s Long View goes deeper into what a quiet but shaky market setup like this one has meant historically. It is free, and it is worth your time.

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