US Job Openings Hit Record High, Exceed Number Of Unemployed Workers

Two months after the number of US job openings reported by the JOLTS unexpectedly dropped by 150,000 led by food service and construction workers, all it took was two months of revised data to set the seasonally-adjusted, statistically inferred US labor market back on track, and according to the latest JOLTS report, in April the number of job openings soared to a new all time high, rising by 65,000 to a record 6.698 million, the highest number of vacant jobs on record...

... for the third consecutive month surpassing the total number of unemployed Americans, meaning that if the job openings and unemployed job searchers were properly aligned, the US would have no unemployment.

The number of job openings increased in durable goods manufacturing (+33,000) and information (+26,000) but decreased in finance and insurance (-84,000). The number of job openings was little changed across all four geographic regions.

Adding to the exuberant picture, while job openings jumped, the number of total hires also increased to just shy of cycle higher, rising to 5.578 million in April from 5.486 million in March. The number of hires was little changed at 5.6 million in April. The hires rate was 3.8 percent. Hires for total private and for government were little changed.

Meanwhile, that other closely watched category, the level of quits - which indicates workers' confidence they can leverage their existing skills and find a better paying job - posted a modest drop, and in April declined to 3.351 million from 3.387 million. The number of quits was little changed for total private and increased for government (+17,000). Quits increased in state and local government education (+14,000) but decreased in arts, entertainment, and recreation (-25,000). The number of quits was little changed in all four regions.

And with a total 5.4 million separations (a 3.6% rate), this means that there were 1.7 million layoffs and discharges in April, 100,000 higher than in March. he layoffs and discharges rate increased to 1.2 percent over the month. The number of layoffs and discharges edged up for total private and was little changed for government. Layoffs and discharges increased in arts, entertainment, and recreation (+51,000) and in finance and insurance (+27,000). The number of layoffs and discharges was little changed in all four regions.

Putting all this in in context

  • Job openings have increased since a low in July 2009. They returned to the prerecession level in March 2014 and surpassed the prerecession peak in August 2014. There were 6.7 million open jobs on the last business day of April 2018, a new series high.
  • Hires have increased since a low in June 2009 and have surpassed prerecession levels. In April 2018, there were 5.6 million hires.
  • Quits have increased since a low in September 2009 and have surpassed prerecession levels. In April 2018, there were 3.4 million quits.
  • For most of the JOLTS history, the number of hires (measured throughout the month) has exceeded the number of job openings (measured only on the last business day of the month). Since January 2015, however, this relationship has reversed with job openings outnumbering hires in most months.
  • At the end of the most recent recession in June 2009, there were 1.2 million more hires throughout the month than there were job openings on the last business day of the month. In April 2018, there were 1.1 million fewer hires than job openings.

Finally, and perhaps most notably, the Beveridge Curve (job openings rate vs unemployment rate), continues to gradually normalize after a nearly decade-long "drift" from its conventional pattern. From the start of the most recent recession in December 2007 through the end of 2009, the series trended lower and further to the right as the job openings rate declined and the unemployment rate rose.  In April 2018, the unemployment rate was 3.9 percent and the job openings rate was 4.3 percent.