The US labour market showed signs of a steady slowdown in October, with job openings increasing moderately and layoffs declining, according to the latest Job Openings and Labor Turnover Survey (JOLTS) report released by the Bureau of Labor Statistics on Tuesday. Job openings, a key indicator of labour demand, rose by 372,000 to 7.744 million at the end of October. However, the September figures were revised downward to 7.372 million from the initially reported 7.443 million. Economists polled by Reuters had anticipated 7.475 million vacancies. Labour Market Dynamics While job openings increased, hires dropped by 269,000 to 5.313 million, and layoffs fell by 169,000 to 1.633 million. These figures suggest a gradual cooling of the labour market rather than a sharp contraction. Hurricanes and strikes also impacted October’s labour market data. Rebuilding efforts in storm-affected regions and the resolution of strikes at Boeing and another aerospace company are expected to contribute to a ...
The US Treasury has reduced its borrowing estimate for the current quarter and projects a smaller cash buffer by year-end, setting the stage for a potential new debt limit confrontation.
The Treasury now estimates $740 billion in net borrowing for July through September, down from the $847 billion forecasted in April. The expected cash balance for the end of September remains at $850 billion.
The Treasury also forecasts a year-end cash balance of $700 billion, which will decrease after the debt ceiling reactivates at the start of next year unless Congress takes action.
The reduction in borrowing needs is partly due to the Federal Reserve's decision to slow the runoff of its Treasury holdings, reducing the necessity for public debt sales. The Treasury started this quarter with more cash than anticipated.
The Treasury's cash balance at the end of June was about $778 billion, above the targeted $750 billion. As of last Thursday, it stood at about $768 billion.
Analysts like Zachary Griffiths from CreditSights note that the year-end cash balance indicates a moderate decline relative to the elevated third-quarter levels. The Treasury aims to hold about five days of cash flows as a buffer, aligning with its policies under the Fiscal Responsibility Act of 2023.
For the October-December period, the Treasury expects to borrow a net $565 billion. The quarterly refunding announcement on Wednesday will reveal plans for long-term debt issuance, with expectations of steady sales for the second consecutive quarter.
Key Takeaways:
- US Treasury cuts borrowing estimate for Q3 to $740 billion from $847 billion.
- Year-end cash balance projected at $700 billion, indicating a potential debt limit issue.
- Reduction in borrowing needs due to Federal Reserve's slowed runoff of Treasury holdings.
- Cash balance at the end of June was $778 billion, higher than targeted $750 billion.
- For Q4, Treasury expects to borrow $565 billion.
- Quarterly refunding announcement on Wednesday to outline long-term debt issuance plans.
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