When last Friday’s disappointing payrolls report hit, which saw just 160K jobs added in April, stocks initially tumbled only to surge as the case of a June rate hike was quickly taken off the table. Not only that, but according to Fed Fund futures as of this moment, the Fed won’t hike until some time in early 2017. However, one look at the latest JOLTS data, admittedly Janet Yellen’s favorite jobs indicator, paints a very different picture.
According to the BLS, in March (there is a one time lag between JOLTS and the payrolls report), the number of job openings soared by 312K, and is now effectively at its all time high level of 5.8 million jobs. If this number is accurate (with the BLS that is a big if after we caught the BLS manipulating JOLTS data back in 2013), it means that the Fed should be hiking essentially… now.
Also confirming that the payrolls data does not capture the underlying euphoria in the jobs market was the quits level, or as Nick Colas calls it the “take this job and shove it” indicator, as it suggests confidence in the job market when people are quitting instead of being laid off/discharged. In April this series also rose by 25K to 3 million, also in line with the highest print since the financial crisis.
There was just one fly in the ointment: the total number of hires dropped by 218,000 in March, offset however by a 114K drop in separations. This was the second biggest drop in hiring since 2013, excluding only the surprising 276K drop record in January, which however was offset by a 385K hiring surge, mostly in retail workers, in February.
But the most interesting observation was that the total number of hires have finally caught up with where the 12 month cumulative change in jobs suggests they should be. The last time this happened, payrolls – and hires – promptly reversed. Will this happen again?
And if not, just what excuses will the Fed come up with this time to keep delaying its rate hike – after all, even the Fed’s Beige Book recently admitted that the FOMC is content with the pace of wage growth. Unless, of course, it was always “one and done” from the beginning…
via http://ift.tt/24Kp9m4 Tyler Durden