September 30, 2025

QuickTakes

Another Bad JOLTS For Job Market

The S&P 500 SPDR ETF (SPY) closed today at 666 (chart). I have fond memories of that number. I wrote on March 16, 2009: "We’ve been to Hades and back. The S&P 500 bottomed last week on March 6 at an intraday low of 666. This is a number commonly associated with the Devil. . . . The latest relief rally was sparked by lots of good news for a refreshing change, which I believe may have some staying power. . . . I'm rooting for more good news, and hoping that 666 was THE low." The same day, the Fed's first round of quantitative easing was expanded to $1.25 trillion in mortgage-related securities and $300 billion in Treasury bonds.

On July 27, 2009, I wrote: "I prefer meltups to meltdowns. The S&P 500 has been on a tear ever since it bottomed at the intraday low of 666 on Friday, March 6. I should have known immediately that this devilish number was the bear market low. It took me a few days to conclude that it probably was the low. . . . I felt like Tom Hanks in 'The Da Vinci Code.' Subsequently, when I told this story to our accounts, I said that I called the bottom in stocks more as a symbolist than as an investment strategist."

So what does the latest 666 mean? Might it be signaling a market top this time? If so, then we can see that happening for the Magnificent-7, as investors struggle to fathom whether all their spending on AI infrastructure will ever be profitable. Meanwhile, the S&P 493 should continue rising on solid earnings. On balance, the S&P 500 should end the year at a new high of around 6800.

Now for some more devilish news out of the labor market today. Among the most real-time indicators of this market are the three jobs availability series included in the Consumer Confidence Index (CCI) survey (chart). In September, the "jobs-plentiful" series fell to 26.9%, while the "jobs-hard-to-get" series rose to 19.1%.

The "jobs-hard-to-get" series is highly correlated with the unemployment rate and suggests that it might have risen in September from August's 4.3% (chart). However, while the former indicates that the duration of unemployment may be increasing, weekly initial unemployment claims indicates that layoffs remain low.

There is also a good correlation between the CCI's jobs availability spread and the job openings series in the JOLTS report (chart). The latter just came out for August, and might be heading lower in September according to the jobs availability spread.

Meanwhile, the pace of hires was a solid 5.1 million during August (chart). During economic expansions, this series typically exceeds the pace of separations attributable to layoffs and quits. During August, they were identical.

The spread between hires and separations is another way to measure the monthly change in payroll employment (chart). This series is confirming the recent weakness in the official payroll numbers. We attribute the weak labor market data to a shortage of workers with the skills needed by employers, who are responding by doing what they can to boost productivity.

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