QUICK QUILL — Challenger’s CEO turnover report, the JOLTS survey and the China manufacturing PMI all flashed evidence of disinflation that counters tariff fears. While evidence of labor market loosening emanated from the first two releases, JOLTS also guided to the potential for upward revisions to April payrolls, which could offset any downside in the first look-see into May’s employment figures.
TAKEAWAYS
- Challenger CEO Exits rose 70% YoY to 214 in April and have numbered 860 year-to-date, a record since 2002; meanwhile, the quarterly average of nonfarm layoffs/discharges and continuing claims are both at cycle highs, flagging a deepening in the labor market downturn
- April Private Nonfarm Quits came in at 3.194 million, below the consensus 3.271 million and reversing the slight uptick seen in Q1; the decline in job security via lower Quits aligns with the continued disinflation in nonfarm average hourly earnings
- The average of S&P Global/Caixin’s New Orders to Stocks of Finished Goods and New Orders to Stocks of Purchases spreads printed at a -1.32 z-score in May, a 5th percentile print; past inversions of this size have historically driven the U.S.’s same spread negative as well