The JOLTS report confirmed a turning point: for the first time since 2021, job openings fell below the number of unemployed, showing demand for workers is weakening. The ISM Services Index, which tracks business activity through company surveys, surprised on the upside at 52.0, while the S&P Global Services PMI, another widely watched gauge of service-sector health, slipped to 54.5. Meanwhile, factory orders fell –1.3% m/m. Together, these reports added to the slowdown we highlighted last week.
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The Fed is still being pushed to cut into strength, a dynamic we noted previously. Q2 GDP was revised up to 3.3%, the fastest pace in nearly two years, driven by consumer spending and data-center investment. But the Fed has less room to maneuver: its cash buffers are nearly gone, the Treasury is flooding markets with new debt, and political battles over independence are heating up. Cuts here may steady markets in the short run, but risk fueling inflation again over time.

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