Job Hiring Far Below Pre-Lehman Levels As Yellen's Favorite Labor Metric Redlining

Tyler Durden's picture

There was some good news in the JOLTS report released earlier today, mostly in the form of the Job Openings category which surged from 4,464K in April to 4.635K in May, well above the 4350K expected and the highest print since 2007 (granted the unadjusted data showed something completely different but that's a different story). And since this is one of Yellen's favorite labor market indicators, it means that the Fed is that much closer to finally turning the liquidity tap off (at least until the market crashes and the market is promptly forced to rush back in and bail everyone out all over again).

Alas, there was also bad news. As the following chart shows, the trend that we have pounded the table on for the past year, namely the lack of actual hiring continues to persist. In fact, while job openings may have soared by nearly 300K in May, the actual number of Hired declined by 52K to 4,718K.

What does this mean? Well, aside from the obvious, namely that US employers just refuse to pick up the hiring pace (and as a result make the Initial Jobless Claims category yet another mockery of the New Normal as they certainly do not reflect a normal hiring environment), it also means that hiring has barely recovered half the losses it sustained relative to the pre-Lehman "Old Normal."

Ironically, the Fed may be preparing to begin hiking rates even as the economy remains stuck in a structural funk in which jobs are somehow added, even if hiring is far below levels that would suggest a normal labor market. Thank you part-time jobs.

 

Another way of seeing the "New Hireless Normal":

 

And perhaps even more stunning, here is the latest Beveridge curve. Based on today's number of Job Openings, the unemployment rate should be at 4.5%. Still think there is "tons of slack" in the economy?