There was an absolute shocker in today's JOLTs report.
While consensus was expecting the BLS to report a print of 10MM in July job openings, nobody - not even the most optimistic whispers - was prepared for the shocking 10.934 million job openings that hit the tape at 10am ET sharp. This unprecedented number of job openings was made possible as more than 4.2 million openings were added in the past 7 months, with every single month of 2021 seeing an increase in job openings, the longest such stretch in history.
Looking at the details, the increase in job openings was driven by a number of industries, with the largest increases in health care and social assistance (+294,000); finance and insurance (+116,000); and accommodation and food services (+115,000).
The record number of job openings stands out in stark contrast against the countless Americans who are still collecting various pandemic emergency unemployment claims, which in the latest week was just above 12 million.
But the biggest shocker is that while we were expecting the BLS to report that there were some 1.7MM more job openings than unemployed workers, a testament to just how broken, supply constrained and/or overheating the US job market is, the actual number meant that there were a record 2.232 million more job openings (10.934MM) compared to the total number of unemployed people which as of August was 8.384 million.
Obviously, with (way) more job openings than unemployed workers, this meant that in June there were again far less than 1 unemployed workers (0.7959 to be exact) for every job opening, down from 0.94 in June, and from a record 4.6 at the peak crisis moment last April.
Unlike last month when hiring hit a near record 6.8 million, in August some of the job openings came at the expense of a slowdown in hiring: in August the BLS reported that hiring dropped by a modest 160K to 6.667 million, as hires decreased in retail trade (-277,000), durable goods manufacturing (-41,000), and educational services (-23,000) while the number of hires increased in state and local government education (+33,000) and in federal government (+21,000).
Finally, and in a sign that the overheating in the labor market appears is nowhere close to ending, in July the level of quits - or people leaving their job voluntarily due to better prospects elsewhere - posted rose again, up by 103K and hitting the second highest on record at 3.977 million, just below the all time high of 3.992 million in April. The number of quits increased in wholesale trade (+34,000) and in state and local government education (+14,000). Quits decreased in transportation, warehousing, and utilities (-25,000) and in federal government (-5,000).
While the latest JOLTS data validates skepticism about "transitory" inflation, as the insufficient pool of labor is obviously inflationary if it continues and will lead to mare wage hikes, there is one caveat: with all emergency unemployment benefits officially expiring this week, it is likely that many of those job openings will be filled as millions of people currently receiving government welfare have to rejoin the labor force leading to a sharp drop in job openings, assuming of course that the mu covid vadiant (now that the receding delta variant is no longer scary enough) won't shut down the economy again in the coming weeks.