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Check out the companies making the biggest moves in premarket trading:
Pioneer Natural Resources — The energy stock soared nearly 10% in premarket trading after The Wall Street Journal reported Pioneer was close to reaching a deal to be bought by Exxon Mobil for about $60 billion. Shares of Exxon were down 3%.

Levi Strauss — The denim apparel maker shed 1.3% after cutting its full-year sales forecast. Levi’s fiscal-third quarter revenue missed expectations, but earnings per share came in slightly above. Levi’s CEO said consumers were buying fewer items due to inflation and rising mortgage and gas prices.
Philips — The Dutch health tech company dropped more than 8.7% after the U.S. Food and Drug Administration said its handling of its 2021 sleep apnea device recall wasn’t adequate. The FDA said additional testing was necessary on the devices, known as continuous positive airway pressure, or CPAP, machines. Shares of rival ResMed gained nearly 3%.
Tesla — Tesla shares fell more than 1% after the EV maker cut the price of some Model 3 and Model Y vehicles in the U.S. The move followed the company’s third-quarter vehicle production and deliveries update, which missed analysts’ expectations.
Apellis Pharmaceuticals — Shares of the biopharmaceutical company rose 5.5% after Apellis reported growing sales for its Syfovre drug in August. JPMorgan upgraded the stock to overweight from neutral, saying that the success of Syfovre should shift sentiment around Apellis heading into 2024.
Aehr Test Systems — Shares fell more than 11% despite Aehr Test Systems reporting an earnings and revenue beat for its first quarter. The company also reaffirmed its guidance for the fiscal year.

Frontline — The shipping stock shed 4.8% in premarket trading after Euronav said its second shareholder, Compagnie Maritime Belge, would acquire Frontline’s shares in Euronav for $18.43 per share.
— CNBC’s Tanaya Macheel and Jesse Pound contributed reporting. More

In a proposed draft, the Cyberspace Administration of China has said no government oversight is needed for data exports if regulators haven’t stipulated that it qualifies as “important.”
New “draft regulation relieves companies of some of the difficulties with cross-border data transfer and personal information protection,” the European Union Chamber of Commerce in China said in a statement to CNBC.
The U.S.-China Business Council’s latest annual survey found the second-biggest challenge for members this year was around data, personal information and cybersecurity rules.

Pictured here is an exhibition on big data for transportation in Chongqing on Oct. 21, 2020.
China News Service | China News Service | Getty Images

BEIJING — Chinese authorities are signaling a softer stance on once-stringent data rules, among recent moves to ease regulation for business, especially foreign ones.
Over the last few years, China has tightened control of data collection and export with new laws. But foreign businesses have found it difficult to comply — if not operate — due to vague wording on terms such as “important data.”

Now, in a proposed update, the Cyberspace Administration of China (CAC) has said no government oversight is needed for data exports if regulators haven’t stipulated that it qualifies as “important.”
That’s according to draft rules released late Sept. 28, a day before the country went on an eight-day holiday. The public comment period closes Oct. 15.

“The release of the draft is seen as a signal from the Chinese Government that it is listening to businesses’ concerns and is ready to take steps to address them, which is a positive,” the European Union Chamber of Commerce in China said in a statement to CNBC.
“The draft regulation relieves companies of some of the difficulties with cross-border data transfer and personal information protection partly by specifying a list of exemptions to relevant obligations and partly by providing more clarity on how data handlers can verify what is qualified by authorities as ‘important data,'” the EU Chamber said.

This is a small but important step for Beijing to show it’s walking the walk when the State Council earlier pledged to facilitate cross-border data flows…

Reva Goujon
Rhodium Group

The EU Chamber and other business organizations have lobbied the Chinese government for better operating conditions.

The cybersecurity regulator’s draft rules also said data generated during international trade, academic cooperation, manufacturing and marketing can be sent overseas without government oversight — as long as they don’t include personal information or “important data.”
“This is a small but important step for Beijing to show it’s walking the walk when the State Council earlier pledged to facilitate cross-border data flows to improve the investment climate,” Reva Goujon, director, China Corporate Advisory at Rhodium Group, said in an email Friday.
The proposed changes reflect how “Beijing is realizing that there are steep economic costs attached to its data sovereignty ideals,” Goujon said.
“Multinational corporations, particularly in data-intensive sunrise industries which Beijing is counting on to fuel new growth, cannot operate in extreme ambiguity over what will be considered ‘important data’ today versus tomorrow and whether their operations will seize up over a political whim by CAC regulators.” 

More regulatory clarity for business?

China’s economic rebound from Covid-19 has slowed since April. News of a few raids on foreign consultancies earlier this year, ahead of the implementation of an updated anti-espionage law, added to uncertainties for multinationals.
“When economic times were good, Beijing felt confident in asserting a stringent data security regime in the footsteps of the EU and with the US lagging behind in this regulatory realm (for example, heavy state oversight of cross-border data flows and strict data localization requirements),” Rhodium Group’s Goujon said.
The country’s top executive body, the State Council, in August revealed a 24-point plan for supporting foreign business operations in the country.
The text included a call to reduce the frequency of random inspections for companies with low credit risk, and promoting data flows with “green channels” for certain foreign businesses.
During consultancy Teneo’s recent trip to China, the firm found that “foreign business sources were largely unexcited about the plan, noting that it consists mostly of vague commitments or repackaging of existing policies, but some will be useful at the margin,” managing director Gabriel Wildau said in a note.
He added that “the 24-point plan included a commitment to clarify the definition of ‘produced in China’ so that foreign companies’ domestically made products can qualify.”
When U.S. Commerce Secretary Gina Raimondo visited China in August, she called for more action to improve predictability for U.S. businesses in China. Referring to the State Council’s 24 points, she said: “Any one of those could be addressed as a way to show action.”
The U.S.-China Business Council’s latest annual survey found the second-biggest challenge for members this year was around data, personal information and cybersecurity rules. The first challenge they cited was international and domestic politics.

Read more about China from CNBC Pro

The council was not available for comment due to the holiday in China.
While the proposed data rules lower regulatory risk, they don’t eliminate it because “important data” remains undefined — and subject to Beijing’s determination at any time, Martin Chorzempa, senior fellow at the Peterson Institute for International Economics, and Samm Sacks, senior fellow at Yale Law School Paul Tsai China Center and New America, said in a PIIE blog post Tuesday.
Still, “not only did the leadership commit to a more ‘transparent and predictable’ approach to technology regulation in the wake of the tech crackdown, the new regulations follow directly on the State Council’s 24 measures unveiled in August, which explicitly call for free data flows. Other concrete actions to improve the business environment could flow from those measures as well,” Chorzempa and Sacks said.
The proposed changes to data export controls follow an easing in recent months on other regulation.
In artificial intelligence, Baidu and other Chinese companies in late August were finally able to launch generative AI chatbots to the public, after Beijing’s “interim regulation” for the management of such services took effect on Aug. 15.

The new version of the AI rules said they would not apply to companies developing the tech as long as the product was not available to the mass public. That’s more relaxed than a draft released in April that said forthcoming rules would apply even at the research stage.
The latest version of the AI rules also did not include a blanket license requirement, only saying that one was needed if stipulated by law and regulations. It did not specify which ones.
Earlier in August, Baidu CEO Robin Li had called the new rules “more pro-innovation than regulation.”  More

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JPMorgan’s Marko Kolanovic is bracing for a 20% sell-off to hit the S&P 500.
According to the Institutional Investor hall-of-famer, high interest rates are creating a breaking point for stocks — and choosing cash at a 5.5% return in money market and short-term Treasurys is a key protection strategy right now.

“I’m not sure how we’re going to avoid it [recession] if we stay at this level of interest rates,” the firm’s chief market strategist and global research co-head told CNBC’s “Fast Money” on Thursday.
The S&P 500 closed at 4,258.19 on Thursday and is on the cusp of a five-week losing streak. The index is down more than 5% over the past month.
Kolanovic believes the weakness isn’t a strong sign a monster move lower is already here. He indicates a near-term bounce is still possible because a lot hinges on economic reports over the next few months.
“[We’re] not necessarily calling for an immediate sharp pullback,” he said. “Could there be another five, six, seven percent upside in equities? Of course… But there’s a downside. It could be 20% downside.”

Arrows pointing outwards

He warns the “Magnificent Seven” stocks, which includes Apple, Amazon, Meta, Alphabet, Nvidia, Tesla and Microsoft, are among the most vulnerable to steep losses due to their historic gains amid high rates. The group is up 83% so far this year — carrying the bulk of the S&P 500’s gains.

“If there’s a recession, I think the magnificent [seven]… will catch down where the rest is,” said Kolanovic, citing beaten-up sectors including consumer staples and utilities.
Plus, Kolanovic believes consumers are getting dangerously cash strapped due to the economic backdrop.
“The job market is still strong. But you are starting to see the stress in [the] consumer if you look at sort of the delinquencies in the [credit] cards and auto loans,” he noted. “We remain somewhat negative still.”
Kolanovic, Institutional Investor’s top-ranked equity strategist, came into the year with an S&P 500 year-end target of 4,200. The index closed 2022 at 3,839.50.
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At the center of the storm of this week’s market turmoil is the 10-year Treasury yield, one of the most influential numbers in finance.
The yield, which represents borrowing costs for issuers of bonds, has climbed steadily in recent weeks and reached 4.8% Tuesday, a level last seen just before the 2008 financial crisis.
“Unfortunately, I do think there has to be some pain for the average American now,” said Lindsay Rosner, head of multi sector investing at Goldman Sachs asset and wealth management.

Federal Reserve Board Chair Jerome Powell speaks during a news conference following a Federal Open Market Committee meeting at the Federal Reserve in Washington, D.C., on July 26, 2023.
SAUL LOEB | Getty

Violent moves in the bond market this week have hammered investors and renewed fears of a recession, as well as concerns about housing, banks and even the fiscal sustainability of the U.S. government.
At the center of the storm is the 10-year Treasury yield, one of the most influential numbers in finance. The yield, which represents borrowing costs for issuers of bonds, has climbed steadily in recent weeks and reached 4.8% on Tuesday, a level last seen just before the 2008 financial crisis.

The relentless rise in borrowing costs has blown past forecasters’ predictions and has Wall Street casting about for explanations. While the Federal Reserve has been raising its benchmark rate for 18 months, that hasn’t impacted longer-dated Treasurys like the 10-year until recently as investors believed rate cuts were likely coming in the near term.
That began to change in July with signs of economic strength defying expectations for a slowdown. It gained speed in recent weeks as Fed officials remained steadfast that interest rates will remain elevated. Some on Wall Street believe that part of the move is technical in nature, sparked by selling from a country or large institutions. Others are fixated on the spiraling U.S. deficit and political dysfunction. Still others are convinced that the Fed has intentionally caused the surge in yields to slow down a too-hot U.S. economy.
“The bond market is telling us that this higher cost of funding is going to be with us for a while,” Bob Michele, global head of fixed income for JPMorgan Chase’s asset management division, said Tuesday in a Zoom interview. “It’s going to stay there because that’s where the Fed wants it. The Fed is slowing you, the consumer, down.”

The ‘everything’ rate

Investors are fixated on the 10-year Treasury yield because of its primacy in global finance.
While shorter-duration Treasurys are more directly moved by Fed policy, the 10-year is influenced by the market and reflects expectations for growth and inflation. It’s the rate that matters most to consumers, corporations and governments, influencing trillions of dollars in home and auto loans, corporate and municipal bonds, commercial paper, and currencies.

“When the 10-year moves, it affects everything; it’s the most watched benchmark for rates,” said Ben Emons, head of fixed income at NewEdge Wealth. “It impacts anything that’s financing for corporates or people.”

The yield’s recent moves have the stock market on a razor’s edge as some of the expected correlations between asset classes have broken down.
Stocks have sold off since yields began rising in July, giving up much of the year’s gains, but the typical safe haven of U.S. Treasurys has fared even worse. Longer-dated bonds have lost 46% since a March 2020 peak, according to Bloomberg, a precipitous decline for what’s supposed to be one of the safest investments available.
“You have equities falling like it’s a recession, rates climbing like growth has no bounds, gold selling off like inflation is dead,” said Benjamin Dunn, a former hedge fund chief risk officer who now runs consultancy Alpha Theory Advisors. “None of it makes sense.”‘

Borrowers squeezed

But beyond investors, the impact on most Americans is yet to come, especially if rates continue their climb.
That’s because the rise in long-term yields is helping the Fed in its fight against inflation. By tightening financial conditions and lowering asset prices, demand should ease as more Americans cut back on spending or lose their jobs. Credit card borrowing has increased as consumers spend down their excess savings, and delinquencies are at their highest since the Covid pandemic began.
“People have to borrow at a much higher rate than they would have a month ago, two months ago, six months ago,” said Lindsay Rosner, head of multi sector investing at Goldman Sachs asset and wealth management.
“Unfortunately, I do think there has to be some pain for the average American now,” she said.

Retailers, banks and real estate

Beyond the consumer, that could be felt as employers pull back from what has been a strong economy. Companies that can only issue debt in the high-yield market, which includes many retail employers, will confront sharply higher borrowing costs. Higher rates squeeze the housing industry and push commercial real estate closer to default.
“For anyone with debt coming due, this is a rate shock,” said Peter Boockvar of Bleakley Financial Group. “Any real estate person who has a loan coming due, any business whose floating rate loan is due, this is tough.”
The spike in yields also adds pressure to regional banks holding bonds that have fallen in value, one of the key factors in the failures of Silicon Valley Bank and First Republic. While analysts don’t expect more banks to collapse, the industry has been seeking to offload assets and has already pulled back on lending.
“We are now 100 basis points higher in yield” than in March, Rosner said. “So if banks haven’t fixed their issues since then, the problem is only worse, because rates are only higher.”

5% and beyond?

The rise in the 10-year has halted in the past two trading sessions this week. The rate was 4.71% on Thursday ahead of a key jobs report Friday. But after piercing through previous resistance levels, many expect that yields can climb higher, since the factors believed to be driving yields are still in place.
That has raised fears that the U.S. could face a debt crisis where higher rates and spiraling deficits become entrenched, a concern boosted by the possibility of a government shutdown next month.
“There are real concerns of ‘Are we operating at a debt-to-GDP level that is untenable?'” Rosner said.
Since the Fed began raising rates last year, there have been two episodes of financial turmoil: the September 2022 collapse in the U.K.’s government bonds and the March U.S. regional banking crisis.
Another move higher in the 10-year yield from here would heighten the chances something else breaks and makes recession much more likely, JPMorgan’s Michele said.   
“If we get over 5% in the long end, this is legitimately another rate shock,” Michele said. “At that point, you have to keep your eyes open for whatever looks frail.” More

Billionaire investor Ken Griffin’s flagship hedge fund rallied last month.
Citadel’s multistrategy flagship Wellington fund gained 1.7% in September.
The market has grown more volatile and fragile as investors grapple with a higher-for-longer interest rate regime.

Ken Griffin, founder and CEO of Citadel, at CNBC’s Delivering Alpha summit on Sept. 28, 2022.
Scott Mlyn | CNBC

Billionaire investor Ken Griffin’s flagship hedge fund rallied last month when the broader market was rattled by tight monetary policy as well as rising recession fears, according to a person familiar with the returns.
Citadel’s multistrategy flagship Wellington fund gained 1.7% in September, bringing its 2023 performance to 12.6%, the person said. The S&P 500 pulled back 4.9% last month, suffering its worst month of the year. The equity benchmark is still up 11% for the year.

The market has grown more volatile and fragile as investors grapple with a higher-for-longer interest rate regime. Stocks resumed the sell-off this week as the 10-year Treasury yield surged to a 16-year high. Many notable investors, including Pershing Square’s Bill Ackman, have warned of a deteriorating economy after a series of aggressive rate hikes.
Griffin, founder and CEO of Citadel, told CNBC last month he was skeptical that this year’s rally, powered mostly by artificial intelligence-related stocks, can be sustainable.
“I’m a bit anxious that this rally can continue,” Griffin said. “Obviously one of the big drivers of the rally has been … just the frenzy over generative AI, which has powered many Big Tech stocks. … We’re sort of in the seventh or eighth inning of this rally.”
Citadel’s equities fund, which uses a long/short strategy, was up 1.1% in September and 10.7% this year, while its global fixed income fund is 8.8% higher so far in 2023, the person said.
Citadel had $61 billion in assets under management as of Sept. 1. The Wellington fund soared 38% in 2022 for its best year ever. More

McDonald’s french fries being prepared.
Daniel Acker | Bloomberg | Getty Images

Check out the companies making headlines in midday trading.
Rivian Automotive — Rivian Automotive shares tanked 19% after the electric vehicle maker announced plans to raise $1.5 billion in convertible notes and offered preliminary third-quarter revenue guidance roughly in line with Wall Street’s expectations. Rivian said it anticipates revenue to range between $1.29 billion and $1.33 billion, versus the $1.3 billion forecast by analysts polled by LSEG, formerly known as Refinitiv.

Exxon Mobil — Shares slid more than 2.3% in midday trading following a further decline in oil prices on the back of an uncertain demand outlook and macroeconomic future.
Clorox — Shares dropped 7.7% on Thursday, one day after the product maker offered worse fiscal first-quarter guidance than analysts polled by FactSet expected. The company said a cyberattack overshadowed benefits from better pricing, cost reduction and supply chain improvements.
UWM Holdings — Shares popped 5.7% after the mortgage company was upgraded by BTIG to buy from neutral. The firm said UWM Holdings’ valuation doesn’t reflect upside from a potential stabilization in interest rates.
Orchard Therapeutics — Shares nearly doubled after Japanese pharmaceutical company Kyowa Kirin announced plans to acquire the biotechnology firm, which specializes in gene therapy, for $478 million.
Vestis — Shares dropped 4.8% after Redburn Atlantic initiated coverage of the uniform company with a buy rating and noted limited valuation downside, saying “risk reward for the stock appears asymmetric.” Vestis completed a spinoff from Aramark on Monday.

Oculis — Shares rose 3.4% after Stifel initiated coverage of the biopharma company with a buy rating and $35 target price. The investment bank cited Oculis’ pipeline of innovative technologies as a reason for the rating.
First Citizens BancShares — Shares gained 1% after Wedbush initiated the regional bank at an outperform rating, citing two recent acquisitions as catalysts for a positive outlook.
Live Oak Bancshares — Live Oak Bancshares added 4.2% after JPMorgan upgraded the stock to overweight and maintained a price target implying more than 40% upside over the next 12 months.
Carrier Global — Shares of the HVAC company dipped 1.3% after Bank of America downgraded Carrier to underperform from neutral. The bank cited slowing demand in Europe for heat pumps as one reason to be negative on the stock.
Johnson & Johnson — Shares of the health-care giant added 0.8% in midday trading after RBC initiated company coverage with an outperform rating. Analyst Shagun Singh noted further potential that has yet to be realized from Johnson & Johnson’s spinoff of Kenvue earlier in 2023.
Constellation Brands — Shares of the alcoholic beverage maker dipped more than 3% midday after Constellation reported sales of wine and spirits fell 14% on a year-over-year basis as well as an 8% decrease in depletions, an industry term for the number of cases sold to retailers by a distributor. Overall, however, the company topped analysts’ earnings and revenue expectations and raised its guidance for its fiscal 2024.
Lamb Weston — Lamb Weston shares jumped 10%. On Thursday, the french fry producer, which supplies McDonald’s, beat analysts’ expectations in its latest quarter on the top and bottom lines. It also raised its fiscal-year guidance. CEO Tom Werner cited solid demand and a favorable pricing environment for raising the fiscal-year guidance.
Instacart — Instacart fell 2.9% after Bernstein initiated coverage of the company at a market perform rating, noting that increased competition challenged the delivery company’s strong digital advertising business.
— CNBC’s Brian Evans, Alex Harring, Tanaya Macheel, Sarah Min, Jesse Pound, Pia Singh, Samantha Subin and Michelle Fox Theobald contributed reporting. More

People walk by electric truck maker Rivian’s newly opened storefront in the Meatpacking District of Manhattan on June 23, 2023 in New York City.
Spencer Platt | Getty Images

Check out the companies making headlines in premarket trading.
Rivian — Shares of the electric vehicle maker plunged 8.7% after Rivian announced a $1.5 billion convertible bond sale and issued disappointing guidance for the third quarter. The company said it expects between $1.29 billion and $1.31 billion in revenue, while analysts polled by StreetAccount forecast $1.31 billion. Rivian also reported its cash and short-term investments lessened between the end of the second and third quarter.

Energy stocks — Shares of oil firms Occidental Petroleum, Chevron and ExxonMobil were all lower in premarket trading, as crude prices added to Wednesday’s steep declines. Occidental ticked down 0.4%, while Chevron and ExxonMobil both pulled back around 1%.
Clorox — Shares slipped 4.4% in premarket trading Thursday, a day after the product maker offered weaker guidance for the fiscal first quarter than analysts expected. The company also said a cyberattack outweighed benefits from pricing, cost saving and supply chain improvements. Raymond James downgraded the stock to market perform from outperform following the guidance.
UWM Holdings — Shares of the mortgage company rose 4.3% in premarket trading after a BTIG upgrade to buy from neutral. BTIG said the valuation for the parent company of United Wholesale Mortgage does not reflect the upside from a potential stabilization in interest rates.
Orchard Therapeutics — The gene therapy stock soared more than 98% on news that the company would be acquired by Japanese pharmaceutical Kyowa Kirin for $478 million.
Vestis — Shares of the uniform company added 2.4% after Redburn Atlantic initiated coverage of the company with a buy rating. Analyst Oliver Davies noted limited valuation downside and forecast 75% upside. Vestis completed a spinoff from Aramark on Monday.
— CNBC’s Alex Harring, Pia Singh and Jesse Pound contributed reporting. More

Sitting in a medical clinic recently, as a young-looking nurse extracted blood from his veins, your columnist’s mind turned to the flexibility of the American labour market. How long, exactly, had she been on the job? The somewhat shocking answer: it was her first month. Six weeks of training was all it took, she explained, to make the transition from eyelash technician to phlebotomist, which offered higher pay and better hours.Workers ditching old jobs for better ones has been a feature of the post-covid American economy. Early last year about 3% of Americans quit their jobs in any given month, the highest in two decades. Since July that has fallen to 2.3%, back to its pre-pandemic level. The decline is a sign that the labour market is gradually normalising. It has gone from being ultra-tight—beset by a seemingly endless worker shortage—to merely moderately tight.image: The EconomistDuring the period of ultra-tightness, analysts and investors paid close attention to a chart. The Beveridge curve, named after William Beveridge, a mid-20th-century British economist, depicts the link between unemployment and job vacancies. It is an inverse relationship: vacancies rise as unemployment falls. The logic is simple. When nearly all would-be workers have jobs, companies struggle to find new staff and have more vacancies.What makes the Beveridge curve fascinating but also frustrating is that it moves around. There is no fixed relationship between vacancies and unemployment. Take, for instance, an unemployment rate of 6%. This was consistent with about 2.5% of jobs in America being unfilled in the early 2000s, but 3.5% in the 2010s and 6% in 2021. As a rule, the higher the vacancy level for any given unemployment rate, the less efficient the labour market, since firms must fight to find workers. In graphical terms, an inefficient Beveridge curve shifts outwards, away from the origin point.The fascinating bit is the explanation for this. Normally, the location of the Beveridge curve is viewed as a measure of skills-matching. If workers lack the skills wanted by employers, the vacancy rate will be higher. During covid-19 and its aftermath, though, the problem was less a skills mismatch than a willingness mismatch. Many people were scared of illness and thus less willing to work. At the same time, having profited from a rapid recovery, many companies were willing to hire additional workers.An exceedingly inefficient labour market was the result. There were two job openings per unemployed person at the start of 2022, the most on record. Given such a Beveridge curve, the dismal conclusion was that unemployment would soar as the Federal Reserve wrestled down inflation. The causal chain went like this: to tame inflation, the Fed had to generate slower wage growth; for wages to slow, vacancies had to fall; finally, in an inefficient labour market, a big fall in vacancies implied a big rise in unemployment.Skip ahead to the present, though, and these fears have receded. Job vacancies have declined without much unemployment. There are now 1.5 job openings per unemployed worker. The labour market, in other words, looks more efficient. The Beveridge curve has shifted inwards, reverting to somewhere close to its pre-pandemic location. The typical explanation is that the willingness mismatch has abated: Americans have re-entered the labour force, while companies have cut their help-wanted advertisements.Question everythingThat, at least, is the conventional story. But think about it for a second and it is does not sit quite right. After all, the Beveridge curve is supposed to depict the state of the labour market. If, however, the curve itself is liable to move around, as this story suggests, it surely cannot be of much use. Do adjustments take place along the curve or does the curve itself change locations? After the fact it seems clear enough. In the moment, it is guesswork.There is a different, and better, way of constructing the Beveridge curve. The standard curve implies that it is the unemployed who fill job vacancies. The problem, as testified by your columnist’s phlebotomist, is that in reality, holes are often filled by job-switchers, not the unemployed. In research published by the Fed’s branch in St Louis, Paulina Restrepo-Echavarría and Praew Grittayaphong have reflected this, proposing a revised Beveridge curve that links prospective job-switchers to vacancies.Instead of the inverse traditional curve, their one has a positive slope: as vacancies rise, more workers consider jumping ship for new jobs. Indeed, they find that about four-fifths of vacancies since 2015 have been geared towards job-switchers, not the jobless. Along with its faithfulness to reality, their curve has another advantage in that it appears to be mostly stable. The pandemic was unusual because of the large rise in both job vacancies and job seekers, but that was an extrapolation of their revised curve, not a shift to a new location. One conclusion is that a relatively soft landing looks more plausible today. Although a decline in vacancies is still needed to calm wage growth, that largely translates into less job-switching rather than higher unemployment.There may be a more profound lesson to draw. In 2020 Katharine Abraham and colleagues at the University of Maryland also looked at whether they could improve the Beveridge curve, this time by incorporating job searchers who are already employed or out of the labour force. Their revised curve, like that of the St Louis Fed’s economists, is more stable than the traditional curve. The implication of that stability is that the economy actually does a decent job of matching workers with jobs.Many people, including politicians from both sides of the aisle, declare that America is plagued by a skills mismatch. Yet the evidence suggests that workers respond to wages, and that firms which are willing to invest can train them up. The skills shortage may be more of a talking-point than a fundamental constraint to growth. Remember: America is a country in which eyelash technicians can become phlebotomists in a matter of weeks. ■Read more from Free exchange, our column on economics:Why the state should not promote marriage (Sep 28th)Renewable energy has hidden costs (Sep 21st)Does China face a lost decade? (Sep 10th)For more expert analysis of the biggest stories in economics, finance and markets, sign up to Money Talks, our weekly subscriber-only newsletter. More