After the Job Openings and Labor Turnover Survey (JOLTS) reported record prints for virtually every notable labor market series last month, in September there was a modest easing across the board.
According to the BLS, after an upward revision in the August job openings from 7.136MM to 7.293MM, a record high, in September this number tumbled by 284K to 7.009 million, the biggest monthly drop since May 2017.
Despite the job openings drop, this was still the 3rd consecutive print above 7 million, confirming how labor-starved US employers are, and the 4th consecutive month in which there were more job openings then unemployed workers: considering that according to the payrolls report there were 6.075MM unemployed workers in October, there is just under 1 million more job openings than unemployed workers currently, a modest drop from last month's record 1.2 million (how accurate the BLS data is, is another matter entirely).
In other words, in an economy in which there was a perfect match between worker skills and employer needs, there would be zero unemployed people at this moment (of course, that is not the case.)
According to the BLS, rhe number of job openings edged down for total private (-188,000) and fell in government (-96,000). Job openings increased in health care and social assistance (+71,000). The number of job openings decreased in many industries, with the largest decreases in professional and business services (-118,000), finance and insurance (-82,000), and state and local government, excluding education (-67,000). The biggest drop in job openings was observed in the South region.
Adding to the exuberant labor picture, while job openings remained above total unemployment, the number of total hires also remained surprisingly high, if also dipping slightly from record highs, and in September it printed at 5.744 million, down from an upward revised, and all time high, 5.906 million in August. According to the historical correlation between the number of hires and the 12 month cumulative job change (per the Establishment Survey), either the pace of hiring needs to drop, or else the number of new jobs will rise significantly in the coming months.
A similar easing was observed when looking at the number of quits - or the so-called "take this jobs and shove it" indicator - which shows worker confidence that they can leave their current job and find a better paying job elsewhere. In September, one month after hitting an upward revised all time high, there was a modest, -47,000 dip to 3.601 million in September, further confirmation that Americans are increasingly confident in their job prospects should they part ways with their current employer.
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 7.0 million open jobs on the last business day of
- Hires have increased since a low in June 2009 and have surpassed prerecession levels. In September 2018, there
were 5.7 million hires.
- Quits have increased since a low in September 2009 and have surpassed prerecession levels. In September 2018,
there were 3.6 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 September 2018, there were 1.3 million fewer
hires than job openings