Institutions: Job market expected to weaken faster than Fed expects

Parsons Brinckerhoff macro analyst Samuel Tombs said the Fed will soon be concerned about “excess labor supply and unwelcome weakness in wage growth”. He said the increase in job openings in the November JOLTS report was a surprise, but there are signs that employment costs are cooling off, Tombs noted that the drop in the quits rate to 1.9% from 2.1% “suggests that the slowdown in [employment cost] growth is even greater.” “As a result, a second straight month of 0.4 percent growth in average hourly earnings looks like noise around a trend that is still slowing.” Tombs expects average hourly earnings to slow in the December nonfarm payrolls data, which will be released Friday.