After the Job Openings and Labor Turnover Survey (JOLTS) reported record prints for virtually every notable labor market series for August, followed by a modest slowdown in September, there was another push higher across most labor market indicators in October. According to the BLS, after a downward revision in the September job openings from 7.009MM to 6.960MM, in October this number surged by 119K to 7.079 million, the second highest number of job openings on record.
With prior revision, this will be not only the 4th consecutive month of job openings printing above 7 million, but more importantly, the 8th consecutive month in which there were more job openings then unemployed workers: considering that according to the payrolls report there were 5.975MM unemployed workers in October, there is now just over 1.1 million more job openings than unemployed workers currently, (how accurate, or politically-biased the BLS data is, is another matter entirely).
In other words, in an economy in which there was a perfect match between worker skills and employer needs, there would be zero unemployed people at this moment (of course, that is not the case.)
According to the BLS, rhe number of job openings increased in information (+45,000), real estate and rental and leasing (+38,000), educational services (+20,000), and state and local government education (+17,000). The number of job openings decreased in state and local government, excluding education (-38,000) and transportation, warehousing, and utilities (-33,000). Job openings were little changed in all four regions.
Adding to the exuberant labor picture, while job openings remained above total unemployment, the number of total hires also remained surprisingly high, surging by 196K in October, and printing at 5.892 million, just shy of the all time high of 5.906 million reached in August. Hires increased in transportation, warehousing, and utilities (+90,000) and durable goods manufacturing (+43,000), but decreased in mining and logging (-11,000). According to the historical correlation between the number of hires and the 12 month cumulative job change (per the Establishment Survey), either the pace of hiring needs to drop, or else the number of new jobs will rise significantly in the coming months.
Yet while both job openings and hires showed continued strength in the labor market, by one metric the job market may have peaked: the so-called “take this jobs and shove it” indicator – which shows worker confidence that they can leave their current job and find a better paying job elsewhere – dipped for a second consecutive month, declining by 50K in October, after dropping 84K in September from an all time high of 3.648 million, suggesting the workers on the margin are somewhat less reluctant to quit their jobs and look elsewhere. Quits increased in health care and social assistance (+33,000), transportation, warehousing, and utilities (+30,000), and educational services (+12,000). The number of quits decreased in other services (-39,000). Quits decreased in the Northeast region.
Putting all this in in context:
- Job openings have increased since a low in July 2009. They returned to the prerecession level in March 2014 and
surpassed the prerecession peak in August 2014. There were 7.1 million open jobs on the last business day of
October 2018. - Hires have increased since a low in June 2009 and have surpassed prerecession levels. In October 2018, there were
5.9 million hires. - Quits have increased since a low in September 2009 and have surpassed prerecession levels. In October 2018, there
were 3.5 million quits. - For most of the JOLTS history, the number of hires (measured throughout the month) has exceeded the number of
job openings (measured only on the last business day of the month). Since January 2015, however, this relationship
has reversed with job openings outnumbering hires in most months. - At the end of the most recent recession in June 2009, there were 1.2 million more hires throughout the month than
there were job openings on the last business day of the month. In October 2018, there were 1.2 million fewer hires
than job openings.
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