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Janet Yellen's "Favorite" Jobs Indicator Just Shrieked A Rate Hike Is Imminent

Tyler Durden's picture




 

Following the surge in overnight screams against a rate hike, which in just the past 24 hours has added those of the World Bank's chief economist, Paul Krugman, and Larry Summers (for the second time), all eyes were focused on Janet Yellen's favoriote Jobs indicator - the JOLTS report, and especially the total nonfarm Job Openings. And here a big problem appeared because while the Fed is now facing tremendous pressure from the outside not to hike in September, the JOLTS report not only gave a green light, but literally shrieked a rate hike in September is inevitable.

The reason: the Job Openings number soared from 5.323MM to a new record high of 5.753MM, smashing expectations of a drop to 5.3MM. In fact, the monthly increase in openings of 430,000 was the highest stretching all the way back to April 2010, and was the fourth highest monthly jump in the history of the series!

To be sure, a more than cursory scan at the components of the jump reveals that not all is well: for example the job openings were all quantity, and zero quality: the biggest increase among "job wanted" poasters was for low-paying jobs (just in case anyone is still confused why there are no wage hikes), including retail trade and leisure and hospitality.

Furthermore, the level of hiring is clearly tapering off, and 4.983MM was the lowest since last August, confirming the lagging nature of jobs data, which is now rolloing over and leading to continued decling in wages for non-supervisory workers.

And then there was the "quits" indicator - the best metric of how much job confidence employees really have, as a jump in quitting (as opposed to terminations) suggests workers have substantial faith in their skillset and that they can quickly find more lucrative jobs elsewhere. This too slumped in July, and at 2.685MM was the lowest print since November of 2014.

 

But to the Fed all that is largely irrelevant.

What does matter to Yellen is that the ratio of number of unemployed people per job opening is now back to pre-crisis levels. To wit: "when the most recent recession began (December 2007), the number of unemployed persons per job opening was 1.8. The ratio peaked at 6.8 unemployed persons per job opening in July 2009 and has trended downward since. The ratio was 1.4 in July 2015."

For Yellen, this will be evidence that virtually all the slack in the labor market has been removed and if wage growth just refuses to materialize, then so be it.

Which means the Fed's boxed-in problem just got even bigger: will Yellen defer the rate hike because of outside influence (and the market tantrum of course) and be widely perceived as a mere puppet of others, or will the Fed not lose any more credibility, and rely on the data - as it has promised repeatedly it does -and which as shown above, is now shrieking a rate hike is long overdue. Find out next week.

 

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Wed, 09/09/2015 - 10:35 | 6526422 pods
pods's picture

I can't wait for the rate cut after they do get it one inch off the ground.

Going to go from 0.25% back down to NIRP in a cocaine heartbeat (H/T Imus).

I say raise them to 5% Janet.  Show us your balls.

pods

Wed, 09/09/2015 - 10:42 | 6526440 bigdumbnugly
bigdumbnugly's picture

5% ?

those would be some low-hangin' clangin' bangin' balls.

 

yep..... put em on the table, janet.

Wed, 09/09/2015 - 10:46 | 6526456 Creepy A. Cracker
Creepy A. Cracker's picture

Market's more-free-money erection just turned limp.

Wed, 09/09/2015 - 10:50 | 6526488 TeamDepends
TeamDepends's picture

WAH Wah wah (game show loser music)

Wed, 09/09/2015 - 11:00 | 6526552 Headbanger
Headbanger's picture

WHAT I SAID!

Wed, 09/09/2015 - 12:15 | 6526958 JungleCat
JungleCat's picture

The gov is gonna have to redefine "job opening".

Just like they have redefined "inflation" and "unemployment".

Wed, 09/09/2015 - 10:41 | 6526444 DOT
DOT's picture

Asking the Yellen for such a display is risk beyond belief, pods, she may actually do it!

Wed, 09/09/2015 - 10:45 | 6526458 Dr. Engali
Dr. Engali's picture

Those aren't her balls hanging that low, they're her nipples.

Wed, 09/09/2015 - 10:50 | 6526487 omniversling
omniversling's picture

Totally fake...Is there anywhere to see them?

(I mean the stats)

Wed, 09/09/2015 - 10:59 | 6526546 Falconsixone
Falconsixone's picture

They just took a pole and went back to sucking their thumbs.

Wed, 09/09/2015 - 12:01 | 6526893 Omen IV
Omen IV's picture

someone should come up with a new index for all those metrics that can easily be manipulated like this one - job openings  - which is the equivalent of adding phony twitter followers to make a candidate look popular - pack the jobs listings and no one knows

Real GNP growth can be enhanced by lowering the inflation rate via the formula "enhancements"

Unemployment rate can be reduced by lowering the period for claiming benefits (people drop out)  or making it harder to claim or having enormous conversion to 1099 workers from W-2 who cant say they are not working as easily as W-2

nothing is real

 

 

Wed, 09/09/2015 - 10:45 | 6526459 CrazyCooter
CrazyCooter's picture

If they do hike, it will be the most piddly fucking rate hike ever. And then they will turn right around and Que Eee 2 In Fin It Eee!

Regards,

Cooter

Wed, 09/09/2015 - 10:48 | 6526471 dimwitted economist
dimwitted economist's picture

Vote now you guys..

 

Rate Hike ^ up arrow

 

No Rate Hike v Down arrow

 

I VOTE NO WAY DO They have the BALLS!!!! NO FUCKING WAY!

Wed, 09/09/2015 - 11:07 | 6526601 TeamDepends
TeamDepends's picture

We agree with Cooter, they will hike it .025 hoping no one notices. If people notice, they will use Common Core math to explain it away.

Wed, 09/09/2015 - 10:51 | 6526498 omniversling
omniversling's picture

Blow jobs Pods...

Wed, 09/09/2015 - 11:15 | 6526646 pods
pods's picture

lol, that one ain't gonna go away is it?

BTW, it's pods, not capital "P". That was from an argument from another board a longer time ago.  Have embraced being one of the "little letter people" ever since.

pods

Wed, 09/09/2015 - 10:56 | 6526527 ThirteenthFloor
ThirteenthFloor's picture

Actually it's "make our DAY on Wall Street".

DAY = Draghi Abe Yellen.

Wed, 09/09/2015 - 11:06 | 6526572 two hoots
two hoots's picture

 

Yellen is looking for any excuse to raise and as the US leads, rates are going up (.25 not being much of an up).  Is QE and a rate rise (say 2%) feasible at the same time?

Looks like we could use those immigrants to fill jobs, likely get a tax credit for hiring them?   

Wed, 09/09/2015 - 10:36 | 6526424 youngman
youngman's picture

Its all those bartender and waitress jobs.....

Wed, 09/09/2015 - 11:11 | 6526621 Sudden Debt
Sudden Debt's picture

Do you know what kind of jobs working ants do?

Me neither but they work and that's  all that matters or they wouldn't be called working ants.

 

Same thing for the masses, the FED don't care what kind of work they do. They work so that means their assets or people like some would call them are turning in a profit.

 

Wed, 09/09/2015 - 12:23 | 6526987 neidermeyer
neidermeyer's picture

NAH ,, sign flipper jobs for those temporary Halloween stores... soon to be followed by temp hires for SEES candy displays inside all the dead malls.

Wed, 09/09/2015 - 14:21 | 6527597 AGuy
AGuy's picture

1. The Number of quits is likely a result of "Mandatory" resignations, as company HR dept. use the low performance method to get rid of employees without having to pay for severance, unemployement insurance, or to replace them with low cost foriegn workers.

2. The increased openings are most likely for foreign, low cost workers, displaced American workers.

Wed, 09/09/2015 - 10:36 | 6526425 City_Of_Champyinz
City_Of_Champyinz's picture

Too bad these assholes will only hire H1b foreign invaders at half the going rate.  Fucking A.

Wed, 09/09/2015 - 10:42 | 6526446 ThirteenthFloor
ThirteenthFloor's picture

Now you got it ! Most new jobs go off shore. That's why so many Indian and Asian restraunts appear. Land of opportunity.

Wed, 09/09/2015 - 10:37 | 6526428 JustObserving
JustObserving's picture

Fucking markets have degenerated to only a guessing game of what the Fed will do.  Can you get more ridiculous?

Wed, 09/09/2015 - 10:53 | 6526510 Consuelo
Consuelo's picture

You'll be amazed...   

Wed, 09/09/2015 - 10:57 | 6526532 Quinvarius
Quinvarius's picture

Yes!  We can put a fat old lady in charge of the Fed.  Wait...

Wed, 09/09/2015 - 10:40 | 6526435 Bay of Pigs
Bay of Pigs's picture

These numbers are a joke. No fuckan way.

Paging Joe Goebbels...

Wed, 09/09/2015 - 10:40 | 6526441 Dr. Engali
Dr. Engali's picture

Maybe there are so many openings because people can make a better living working the system. We don't need a rate hike, what we need is more migrant workers to do the jobs Americans won't do. Keep printing Janet, my retirement is counting on you.

Wed, 09/09/2015 - 10:50 | 6526492 pods
pods's picture

I recently went back to my hometown (in the Rust Belt) for a wedding.  You would not believe the amount of able bodied people doing absolutely nothing on a Friday afternoon.  These people did not take off early.  They were in housepants hanging out on their front porch.

It was saddening to me. Maybe the bennies are really that good and working is for suckers?

pods

Wed, 09/09/2015 - 11:00 | 6526557 RaceToTheBottom
RaceToTheBottom's picture

I would guess that they want to work, just no work that they can add value at...

Either no investment in people or cheaper to bring in H1Bs to do work.

Wed, 09/09/2015 - 11:33 | 6526724 pods
pods's picture

There definitely is no investment there. All the legacy industry (IBM was founded there) is gone and it is too expensive to start anything that isn't attached to a gov teat.

pods

Wed, 09/09/2015 - 10:42 | 6526445 Comte d'herblay
Comte d'herblay's picture

I'd sooner believe a rate hike of < .001% is imminent, as J Jell is not a Smurf in drag. 

 

https://c1.staticflickr.com/3/2817/10547392033_9accff5c59_b.jpg

 

Wed, 09/09/2015 - 11:56 | 6526867 Nobody For President
Nobody For President's picture

Fake photo - those are only $1s getting cranked out.

Wed, 09/09/2015 - 10:42 | 6526447 BlueStreet
BlueStreet's picture

Raise or don't raise this ship is going down.  

Wed, 09/09/2015 - 10:42 | 6526448 Consuelo
Consuelo's picture

 

 

"To be sure, a more than cursory scan at the components of the jump reveals that not all is well: for example the job openings were all quantity, and zero quality: the biggest increase among "job wanted" poasters was for low-paying jobs (just in case anyone is still confused why there are no wage hikes), including retail trade and leisure and hospitality"

 

Don't show this little distraction to the gentleman from Brown Brothers Harriman that posts regularly on the weekends here, and for whom the 'JOLTS' report represents nothing short of Gawd's final word on the underlying 'health' of the economy...

 


 


Wed, 09/09/2015 - 10:43 | 6526450 khnum
khnum's picture

ultimately I bet the decision is probably made on a golf course or in a restaurant or bar because they know all the information available is a crock of shit

Wed, 09/09/2015 - 10:44 | 6526452 HardlyZero
HardlyZero's picture

DOW jitters at the tippy top (again). 

Which way for the wedge breakout ? (it is Wednesday now so no fake Tuesday market).

After Asia and EU it looked like a breakout to the upside...but now after the concerns of interest rate rise ?  DOW down (Apple down, Disney down, Walmart down).

Wed, 09/09/2015 - 10:44 | 6526454 redc1c4
redc1c4's picture

5.753MM j*bs.... would you like fries with them?

pull the other one: it's got bells on it.

Wed, 09/09/2015 - 10:45 | 6526457 Panic Mode
Panic Mode's picture

Time to start moving the goal post.

Wed, 09/09/2015 - 10:47 | 6526465 Lolitsa
Lolitsa's picture

A society that bases its monetary policy on lies is doomed to failure.

Wed, 09/09/2015 - 10:47 | 6526469 RaceToTheBottom
RaceToTheBottom's picture

Total recovery!!!  Yeah!!!  Roses for everyone!!!

Wed, 09/09/2015 - 10:49 | 6526479 Soul Glow
Soul Glow's picture

I wish the unemployment for economists was high.

:(

Wed, 09/09/2015 - 10:49 | 6526481 venturen
venturen's picture

can't raise rates....too much debt....just a swirling black hole of debt. The criminal olligrachy will just keep stealing from savers till all that is left are an aristoracy of dollar pushers and the Serfs cleaning their pools and growing their food. Death to Hedgies and the Mega Banks

Wed, 09/09/2015 - 10:50 | 6526484 Wilcox1
Wilcox1's picture

So now they are goalseeking the demolition that Deutsche Bank talks about?

Wed, 09/09/2015 - 10:50 | 6526486 redc1c4
redc1c4's picture

let's do the math: 94 million people out of the w*rk force, 6 million openings...

88 million people still unemployed.

Recovery Summer 2015 is a smashing success... not.

Wed, 09/09/2015 - 10:52 | 6526503 Consuelo
Consuelo's picture

 

 

So if we read this right, what the article basically suggests is that either Mrs. Yellen will 'see through' the JOLTS report and 'stand down' or, she's ignorant of the readily available underlying data as presented right here in front of God & the horses, and proceeds to hut-hut...?

Wed, 09/09/2015 - 10:53 | 6526508 mendigo
mendigo's picture

Thats a problem.

If everyone is working, who will we send to afganistan?

You know, to fight the War on Terrortm.

 

Wed, 09/09/2015 - 10:55 | 6526520 viator
viator's picture

Good news, but bad news.

Wed, 09/09/2015 - 10:55 | 6526522 arbwhore
arbwhore's picture

The hike will happen. She will unhike once the aftermath is apparent. Then QE.

Wed, 09/09/2015 - 10:56 | 6526530 q99x2
q99x2's picture

Good everything is fixed and I can go back to sleep.

Wed, 09/09/2015 - 11:00 | 6526536 Vinividivinci
Vinividivinci's picture

Here's a jolt for you...
Here in Montreal, I have determined that at the minimum, ½ the want ads listed on popular web sites (not to name any), are fakes !
Example, I see ads for dishwashers at $15/hour...no effing way I say.
Minimum wage is the norm ($10.75/hour).
Plus , you can only contact the "suposed" employers by email ( at coded and indirect email addresses).
Ive sent out dozens of emails, and not ONE call back.
However, it looks greats for the .gov "stats".

Wed, 09/09/2015 - 12:06 | 6526913 Dragon HAwk
Dragon HAwk's picture

I love those who's unhappy at our company job listings. big tip off is a post office box. boss goes thru the applications and says, fire those idiots out on the floor looking  for work..  or calls his buddy at the country club and says.. hey did you know your lead accountant is looking for work.

Wed, 09/09/2015 - 10:59 | 6526544 uhb
uhb's picture

After months of sh1t, finally a good article by the tylers... i was about to give up on ZH...

 

The question remains, where did most of the good tylers go?

Wed, 09/09/2015 - 11:00 | 6526556 fromthinair
fromthinair's picture

Thanks for this post zh, I have been waiting on the FED to call it "We pulled it off". Once FED hikes and world doesn't fall apart,  I can declare "The Plan B" official. This plan requires "Their asset and your labor" when They were fully aware that the promised land does not exist. 

Greece was the testing ground. The Plan B fell apart during the week of the referendum but came back strongly then the Greek PM caved under circumstances know...  probably only to the then finance minister.

Sep 15, I will publish "The General Theory of Inflation". ZH, you know this theory and problably many others too. The only question is why don't we believe in it?

It will be best to read in chronologic order.  Only two people in the world have read it all... in one sitting.

http://just-a-thought-from-thinair.blogspot.com/

Wed, 09/09/2015 - 11:03 | 6526575 large_wooden_badger
large_wooden_badger's picture

The market is thirsty for moar NIRP and Janet's punchbowl is full of turds.

Wed, 09/09/2015 - 11:07 | 6526597 goldenbuddha454
goldenbuddha454's picture

Muppets grab ankles (again!)

Wed, 09/09/2015 - 11:07 | 6526598 bankonzhongguo
bankonzhongguo's picture

The smartest guys in the room don't ride the bus.

Wed, 09/09/2015 - 11:21 | 6526676 Falconsixone
Falconsixone's picture

Smart guys sell bus tires from china that dont last long.

Wed, 09/09/2015 - 11:11 | 6526620 Falconsixone
Falconsixone's picture

Twiddling nipples while nursing red headed step urban cousins.

Wed, 09/09/2015 - 11:12 | 6526631 Phillyguy
Phillyguy's picture

The great job “boom” in the USA- temp positions- low pay/minimum wage, no benefits and zero job security. The lucky individuals who land these great “jobs” can now go out and purchase a new car with a sup-prime auto loan!

Paul Craig Roberts has written extensively on this- see: www.paulcraigroberts.org/2015/03/06/another-dubious-jobs-report-paul-cra...

Wed, 09/09/2015 - 14:08 | 6526757 RaceToTheBottom
RaceToTheBottom's picture

Holiday retail workers.

Christmas Tree trimmers.

People will be fighting to get a full-time, year round job of WalMart greeter.....

 

"But, But, I have  Ivy League degree in underwater basket weaving.....  Why is there no job for me?  

Default to you, Mr Yaleie?  

Oh Guaranteed by US Gov?"

Bummer for Taxpayer, great for Bankster Welfare and Education Welfare.

Wed, 09/09/2015 - 11:22 | 6526683 khakuda
khakuda's picture

How long until she says that the JOLTS report is no longer her preferred measure?

I give it 10 minutes.

Wed, 09/09/2015 - 11:30 | 6526714 Falconsixone
Falconsixone's picture

Waiting for the hiring greeders (corrupt 500) to bust open their wallets. Maybe when it gets back up to 1990 wages I'll pick a shove up.

Wed, 09/09/2015 - 11:40 | 6526771 I Write Code
I Write Code's picture

I'm not sure that an enabling statistic comprises a "shriek".

More like there are so few even marginally bullish statistics, it's a shock to see one at all.

Wed, 09/09/2015 - 11:47 | 6526818 wildeblogger
wildeblogger's picture

The legal instrument for our exchange of wealth (capital) is has been fully socialized by the Fed (free - for the 1%).   Why would the Fed be motivated to eliminate free money to the 1% (and the government class)? 

Wed, 09/09/2015 - 12:30 | 6527028 crashguru
crashguru's picture

A 0.25% hike will do nothing to the US economy, but it will hurt the commodities and EM economies. That is what her bosses want.

Wed, 09/09/2015 - 12:41 | 6527081 Spungo
Spungo's picture

Janet's favorite job is rim.

Wed, 09/09/2015 - 13:16 | 6527254 libertysghost
libertysghost's picture

Couldn't it be that the Fed wants an excuse to bump the rate up a little ahead of it doing so itself naturally...creating the illusion of control out of a possible consequence of Chinese (etc) T-Bill dumps, oil price lows, and the reduced use of the dollar (as a percentage of global trade transanctions) trend?  

At this point it's perception management 99%.  If interest rates are going to go up either way (they might be predicting), then at least we can try and squeeze some legitimacy out of pretending it happened because "it was best in our coordination of the economy".  Just a thought.

Wed, 09/09/2015 - 14:50 | 6527779 Ignernt idgit
Ignernt idgit's picture

Rate hike... ain't happenin'.  That's all I got to say, "ain't happenin". 

If Fed raises rate, or does nothing, we'll continue with entrenched deflationary forces.   If Fed goes back to printing money, eventually we'll get whiplash hyperinflation.  My prediction is there will be more QE before we see any rate hike. 

Wed, 09/09/2015 - 15:33 | 6528000 Falling Down
Falling Down's picture

Just what constitutes an "unemployed person"?

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