Skip to main content
logo
Financial Professional Login
Welcome
Log in for exclusive access and a personalized experience
Log in Sign up
Benefits of creating a free account
  • Customize our Guide to the Markets and unlock bonus slides
  • Utilize our award-winning Portfolio Construction and Retirement Planning Tools
  • Access expert commentary from Dr. David Kelly and more...
Hello
  • My Collections
    View saved content and presentation slides
  • My Subscriptions
    Manage my subscription preferences
  • Products

    Products

    • Mutual Funds
    • ETFs
    • SmartRetirement Funds
    • 529 Portfolios
    • Alternatives
    • Separately Managed Accounts
    • Money Market Funds
    • Commingled Funds
    • Featured Funds

    Asset Class Capabilities

    • Fixed Income
    • Equity
    • Multi-Asset Solutions
    • Alternatives
    • Global Liquidity
  • Investment Strategies

    Investment Approach

    • ETF Investing
    • Model Portfolios
    • Separately Managed Accounts
    • Sustainable Investing
    • Commingled Pension Trust Funds

    Education Savings

    • 529 Plan Solutions
    • College Planning Essentials

    Defined Contribution

    • Target Date Strategies
    • Startup and Micro 401(k) Plan Solutions
    • Small to Mid-market 401(k) Plan Solutions
  • Insights

    Market Insights

    • Market Insights Overview
    • Guide to the Markets
    • Quarterly Economic & Market Update
    • Guide to Alternatives
    • Market Updates
    • On the Minds of Investors
    • Principles for Successful Long-Term Investing
    • Weekly Market Recap

    Portfolio Insights

    • Portfolio Insights Overview
    • Asset Class Views
    • Equity
    • Fixed Income
    • Alternatives
    • Long-Term Capital Market Assumptions
    • Multi-Asset Solutions Strategy Report
    • Strategic Investment Advisory Group

    Retirement Insights

    • Retirement Insights Overview
    • Guide to Retirement
    • Principles for a Successful Retirement
    • Defined Contribution Insights
  • Tools

    Portfolio Construction

    • Portfolio Construction Tools Overview
    • Portfolio Analysis
    • Model Portfolios
    • Investment Comparison
    • Bond Ladder Illustrator

    Defined Contribution

    • Retirement Plan Tools & Resources Overview
    • Target Date Compass®
    • Core Menu Evaluator℠
    • Price Smart℠
  • Resources
    • Account Service Forms
    • Tax Planning
    • News & Fund Announcements
    • Insights App
    • Events
    • Library
    • Market Response Center
  • About Us
    • Diversity, Equity, & Inclusion
    • Media Resources
  • Contact Us
  • Role
  • Country
  • Shareholder Login
    Hello
    • My Collections
      View saved content and presentation slides
    • My Subscriptions
      Manage my subscription preferences
    • Log out
    Financial Professional Login
    Welcome
    Log in for exclusive access and a personalized experience
    Log in Sign up
    Benefits of creating a free account
    • Customize our Guide to the Markets and unlock bonus slides
    • Utilize our award-winning Portfolio Construction and Retirement Planning Tools
    • Access expert commentary from Dr. David Kelly and more...
    Log out
    Search
    Search
    Menu
    You are about to leave the site Close
    J.P. Morgan Asset Management’s website and/or mobile terms, privacy and security policies don't apply to the site or app you're about to visit. Please review its terms, privacy and security policies to see how they apply to you. J.P. Morgan Asset Management isn’t responsible for (and doesn't provide) any products, services or content at this third-party site or app, except for products and services that explicitly carry the J.P. Morgan Asset Management name.
    CONTINUE Go Back
    1. After robust job gains, is the labor market coming into balance?

    • LinkedIn Twitter Facebook Line

    After robust job gains, is the labor market coming into balance?

    10/07/2022

    Stephanie Aliaga

    In combination with job openings falling, continued progress on job gains, particularly in the sectors with the greatest demand, is a welcome signal for investors that a more balanced labor market could put a lid on inflationary pressures and the Federal Reserve’s hawkish trajectory.

    Stephanie Aliaga

    Research Analyst

    Listen to On the Minds of Investors

    10/07/2022

    Show Transcript Hide Transcript

    Stephanie Aliaga:.:           

    Hello, my name is Stephanie Aliaga, Research Analyst for JP Morgan Asset Management, and welcome to On the Minds of Investors.

    Today's blog answers the question, after robust job gains is the labor market coming into balance? The September job support show the economy continues to make progress in easing labor market tightness. The recent pace of job growth remains solid, but is moderated and wage growth continues to run at a more modest pace of 0.3% month over month. In combination with job openings falling, continued progress on job gains, particularly in those sectors with the greatest demand is a welcome signal for investors that a more balanced labor market could put a lid on inflationary pressures and the Fed's hawkish trajectory. Among the report highlights, we saw non-farm payrolls rise by 263,000. Slightly above consensus expectations, but still at the slowest pace since April 2021, private sector job gains were broad base with the greatest strength in leisure and hospitality and in healthcare, and excluding the dip in government jobs, private payrolls rose by robust 288,000.

     The pace of job gains has also moderated averaging only 360,000 over the last six months after averaging 588,000 in the prior six months, the unemployment rate felled at 3.5% from 3.7%, reflecting a modest dip in both unemployment and in labor force participation. And average hourly earnings rose by 0.3% month over month and 5% from a year ago, down from its peak of 5.6% in March.

    We don't expect the Fed to change its trajectory following this report, and we continue to expect them to hike rates by 75 basis points in November, followed by a further 50 basis points in December. However, in the coming months, it may begin to acknowledge that the traditional relationships between economic growth, job openings, payroll job growth, unemployment and wage gains have become distorted in the post pandemic economy. JOLTS job openings peaked in April, and we found that in the five recessions that preceded the pandemic, the peak in job openings preceded rise unemployment by about 12 to 14 months. However, today we still have a historically high 1.7 job vacancies per unemployed worker, so the lag could be longer this time around.

    In the meantime, the economy may well see many more months of solid job gains to cure this backlog of vacancies, which would push an eventual rise unemployment out to late 2023 or even 2024, and allow wage growth to ease in the meantime.

    The September Jobs report showed the economy continues to make progress in easing labor market tightness. The recent pace of job growth remains solid but has moderated, and wage growth continues to run at a more modest pace of 0.3% month-over-month. In combination with job openings falling, continued progress on job gains, particularly in the sectors with the greatest demand, is a welcome signal for investors that a more balanced labor market could put a lid on inflationary pressures and the Federal Reserve’s hawkish trajectory. 

    Among the report highlights:

    • Nonfarm payrolls rose by 263,000, slightly above consensus expectations, but still at the slowest pace since April 2021.  Private sector job gains were broad-based with the greatest strength in leisure and hospitality and healthcare. Excluding the dip in government jobs, private payrolls rose by a robust 288,000.
    • The pace of job gains over the last six months has averaged 360,000, down from 588,000 in the prior six months.
    • The unemployment rate fell to 3.5% from 3.7%, reflecting a modest dip in both unemployment and labor force participation. 
    • Average hourly earnings rose 0.3% month-over-month and 5.0% year-over-year after peaking at 5.6% year-over-year in March.

    We don’t expect the Federal Reserve (Fed) to change its trajectory following this report and continue to expect the Fed to hike rates by 0.75% in November followed by a further 0.50% in December. However, in coming months, it may begin to acknowledge that the traditional relationships between economic growth, job openings, payroll job growth, the unemployment rate and wage gains have become distorted in this post-pandemic economy. Job Openings and Labor Turnover Survey (JOLTS) job openings peaked in April and, in the five recessions that preceded the pandemic, we estimate that the peak in job openings preceded a rise in unemployment by 12-14 months on average. However, with a still historically high 1.7 job vacancies per unemployed worker, this lag could be longer this time around. In the meantime, the economy may well see many more months of solid job gains to cure the backlog of vacancies, pushing an eventual rise in unemployment out to late 2023 or 2024 but allowing wage growth to ease in the meantime. 

    A peak in job openings tends to precede a rise in unemployment by 12-14 months

    JOLTS job openings* in thousands, unemployment rate, SA

    Four charts showing how a peak in job openings tends to precede a rise in unemployment by 12-14 months.

    Source: U.S. Department of Labor, J.P. Morgan Asset Management. *JOLTS job openings from April 1978 to November 2000 are J.P. Morgan Asset Management estimates. Data are as of October 7, 2022. 

    09pf221602182411

    EXPLORE MORE

    On the Minds of Investors

    What investment questions are on the minds of investors? Explore the questions investors ask frequently and find answers at J.P. Morgan Asset Management.

    Read more

    Guide to the Markets

    The J.P. Morgan Guide to the Markets illustrates a comprehensive array of market and economic histories, trends and statistics through clear charts and graphs.

    Read more

    JPMorgan Ultra-Short Income ETF

    Invests primarily in a diversified portfolio of short-term, investment grade fixed-and floating-rate corporate and structured debt while actively managing credit and duration exposure.

    Read more
    • Federal Reserve
    • US economy
    • Volatility
    J.P. Morgan Asset Management

    • Capital Gains Distributions
    • eDelivery
    • Fund Documents
    • Glossary
    • Help
    • How to invest
    • Important Links
    • Mutual Fund Fee Calculator
    • Accessibility
    • Form CRS and Form ADV Brochures
    • Investment stewardship
    • Privacy
    • Proxy Information
    • Senior Officer Fee Summary
    • SIMPLE IRAs
    • Site disclaimer
    • Terms of use
    J.P. Morgan

    • J.P. Morgan
    • JPMorgan Chase
    • Chase
    Opens LinkedIn site in new window Opens Youtube site in new window Opens Twitter site in new window

    This website is a general communication being provided for informational purposes only. It is educational in nature and not designed to be a recommendation for any specific investment product, strategy, plan feature or other purposes. By receiving this communication you agree with the intended purpose described above. Any examples used in this material are generic, hypothetical and for illustration purposes only. None of J.P. Morgan Asset Management, its affiliates or representatives is suggesting that the recipient or any other person take a specific course of action or any action at all. Communications such as this are not impartial and are provided in connection with the advertising and marketing of products and services. Prior to making any investment or financial decisions, an investor should seek individualized advice from personal financial, legal, tax and other professionals that take into account all of the particular facts and circumstances of an investor's own situation.

     

    Opinions and statements of financial market trends that are based on current market conditions constitute our judgment and are subject to change without notice. We believe the information provided here is reliable but should not be assumed to be accurate or complete. The views and strategies described may not be suitable for all investors.

     

    INFORMATION REGARDING MUTUAL FUNDS/ETF: Investors should carefully consider the investment objectives and risks as well as charges and expenses of a mutual fund or ETF before investing. The summary and full prospectuses contain this and other information about the mutual fund or ETF and should be read carefully before investing. To obtain a prospectus for Mutual Funds: Contact JPMorgan Distribution Services, Inc. at 1-800-480-4111 or download it from this site. Exchange Traded Funds: Call 1-844-4JPM-ETF or download it from this site.

     

    J.P. Morgan Funds and J.P. Morgan ETFs are distributed by JPMorgan Distribution Services, Inc. JPMorgan Private Markets Fund is distributed by J.P. Morgan Institutional Investments Inc. Both are affiliates of JPMorgan Chase & Co. Affiliates of JPMorgan Chase & Co. receive fees for providing various services to the funds. JPMorgan Distribution Services, Inc. is a member of FINRA  FINRA's BrokerCheck

     

    INFORMATION REGARDING COMMINGLED FUNDS: For additional information regarding the Commingled Pension Trust Funds of JPMorgan Chase Bank, N.A., please contact your J.P. Morgan Asset Management representative.

     

    The Commingled Pension Trust Funds of JPMorgan Chase Bank N.A. are collective trust funds established and maintained by JPMorgan Chase Bank, N.A. under a declaration of trust. The funds are not required to file a prospectus or registration statement with the SEC, and accordingly, neither is available. The funds are available only to certain qualified retirement plans and governmental plans and is not offered to the general public. Units of the funds are not bank deposits and are not insured or guaranteed by any bank, government entity, the FDIC or any other type of deposit insurance. You should carefully consider the investment objectives, risk, charges, and expenses of the fund before investing.

     

    INFORMATION FOR ALL SITE USERS: J.P. Morgan Asset Management is the brand name for the asset management business of JPMorgan Chase & Co. and its affiliates worldwide.

     

    NOT FDIC INSURED | NO BANK GUARANTEE | MAY LOSE VALUE

     

    Telephone calls and electronic communications may be monitored and/or recorded.
    Personal data will be collected, stored and processed by J.P. Morgan Asset Management in accordance with our privacy policies at https://www.jpmorgan.com/privacy.

     

    If you are a person with a disability and need additional support in viewing the material, please call us at 1-800-343-1113 for assistance. 

     

    Copyright © 2023 JPMorgan Chase & Co., All rights reserved