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Yellen's "Favorite" Labor Indicator Tumbles: Job Openings Drop Most Since 2009
One month ago, when the JOLTS data showed the highest number of job openings in history, rising by a near record 430,000 to 5.8 million vacant positions, most speculated that this data - considered to be Janet Yellen's favorite indicator of slack in the labor market now that the unemployment rate has become utterly unreliable due to the 94 million Americans out of the labor force - had sealed the fate of a September rate hike.
It did not, as instead the Fed decided to shift to its 4th mandate (the 3rd being the stock market), namely the "global environment" as the reason not to tighten monetary conditions.
But while the JOLTs data turned out to be useful to "confirm" a stronger economy, even if it was roundly rejected when it was expected to be the fulcrum catalyst for monetary policy change, we are confident it will be completely ignored this month when moments ago the BLS revealed that in August, the number of job openings tumbled back down by 298,000 to 5.37 million: far below expectations and the biggest monthly drop since the 301,000 slide in March of 2009.
So was this the job openings peak of the current cycle?
The answer will have to wait until next month as the JOLTS series is consistently revised and remarkably unreliable (and frequently made up: recall it was this site that caught the BLS fabricating data back in 2013), however another series that may serve as a guide is the JOLTS total hires vs the cumulative change in payrolls over the past year. Both of these series have topped out, even as the number of hires this cycle remains far below the peak from the previous cycle, plateauing just above 5 million compared to 5.4 million during the last bubble burst, while the 12 month cumulative change in payrolls recently slipped back under 3 million after peaking at 3.2 million in February, and well above the prior cycle peak.
Worse yet, looking at the JOLTS net turnover (hires less separations) and comparing it to the monthly change in Payrolls - two series which should otherwise overlap - one of two things will have to happen: either hires will be revised sharply lower (or separations higher) or payrolls in the past few months will need to be pushed well higher. Most likely, the estimated rate of hiring will end up being revised far lower, once again confirming the labor market is slowing down substantially.
Finally, looking at the separations end of the equation, what we see is that slowly but surely even the BLS is catching up to the private sector, which recently announced the highest number of terminations among energy companies since the crisis, and sure enough, a chart of the discharges in the Midwest shows that while the trendline is now pointing decidedly higher, it will go far higher before any substantial recovery in the US shale space.
Bottom line: despite being two months backward looking, today's JOLTS report provide the latest batch of weak news coming from the US labor market, which likely explains the ongoing levitation in stocks which have officially given up on the "rate hike is good for stocks" narrative, and fallen back to what has worked for the past 7 years, namely terrible economic news being great news for risk assets.
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Okay I'm confused. Are they raising rates because rising CONsumer sentiment is their favorite indicator, or are they lowering rates because their favorite labor indicator tumbled? Is it too early to start drinking?
Hell no.
Happy Aloha Friday bitchez...
Uh-oh BoP...
This doesn't portend well for tomorrow's weekly M2M... JOLT Cola and car sales are about all he has left in the quiver...
Whatever happened to the Bernanke narrative of boosting the stock market so the trickle down effect would lift the economy? Wasn't that the justification for QE's? Is that and NIRP still the plan with just about every asset in bubble territory?
I'm heading out for a drink.... Looks like I picked a hell of a week to quit drinking bourbon...
A winner never quits and a quitter never wins. Now get out there and pound it like you mean it...!!!
Hey check the price of a big gulp at a Truck stop, $1.74 for 24 oz, making it more expensive than Gasoline.
Anti-trust anyone?
If you're confused you should be buying stawks. And it's never too early to start drinking.
TPP Intellectual property chapter, fresh from WikiLeaks:
http://www.globalresearch.ca/wp-content/uploads/2015/10/WikiLeaks-TPP-IP...
A "job opening" in this economy is really a churn indicator for crappy minimum wage 29 hour/week positions.
That ramp since 2009 isn't career jobs, it's people who lost career jobs working two or three part-time jobs.
It's like unemployment applications "going down"; when you've filed you can't file again, and when you give up and go on food stamps and Social Security disability or go back to school on a student loan.
They not only fudge all the data, they never connect the dots, because they don't want too!
That ramp might be foreign workers in the US getting the jobs.
ZH did a story on that.
Good for another 1000 points on the DOW.
Whacky.
I really get the jolts from this report.
280mg worth - eyes W-I-D-E open...
Outlaw steam shovels, hand out spoons.
Full empoyment.
thank goodness old man winter is waiting to make these numbers managable. there is some bad news on that account, a strong El Nino usually means an abbreviated hurricane season, and without all the carnage and death (and broken windows, YEAH) the economy will not get a jolt from f lorida storm damage, sell your home depot and lowes stock. the service sector s the prime jobs conduit, and disneyland raised fees, but did they raise wages, and if they did are a few more mickeys and minnies going to lose their jobs? see walmart. or maybe theyll have to serve breakfast all day like mcdonalds which the franchisees hate. some of those people are making $15 and hour! so shut up and serve i say, and they probably arent going to hire any extra help.
In the context of Usury under the Roman Empire, then the Catholic Church and Protestant states... maybe there is a good reason for this.
You have value created by labor and resources, or by Usury, or by a mixture of the two.
USA GDP is very questionable as others point out, government purchases are actually debt and a drag on the economy, Rentier Activity is wealth extraction.
Interesting Video on this.
Goy Guide to World History (9:15 minutes in he states Rome was based on Usury, Capitalism is state sponsored Usury.
https://www.youtube.com/watch?v=KNWPYQjXSYA
E. Michael Jones, former professor accused of antisemitism.
Everyone that wants a job has one!
The rest are spending more quality time with their families while vactioning and shopping!
Have we reached "full employment" yet? I know we're close !
Depends on what kinds of separations. There was a 700K unadjusted jump in separations, but 400k of that was quits. A spike in quits is usually a good economic indicator.