US Job Opening Soar To All Time High: 1.3 Million More Than Unemployed Workers

The Fed's dovish U-turn appears in jeopardy again.

After a modest slowdown in job openings which started in September and continued through November, today's JOLTS report - Janet Yellen's favorite labor market indicator - for the month of January  showed an unprecedented surge in job openings across most categories at the start of 2019, with the total number soaring from an upward revised 7.479 million (from 7.335 million), to an all time high 7.581 million, smashing expectations of a 7.225 million print.

And thanks to the surge in job openings, this will be the 11th consecutive month in which there were more job openings then unemployed workers: considering that according to the payrolls report there were 6,235MM unemployed workers, there are now exactly 1.346 million more job openings than unemployed workers currently, (how accurate, or politically-biased 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.)

Another issue: with the Fed positioned for an economic slowdown, the JOLTS data better turn negative fast or else Powell will soon be facing some very unpleasant questions why the Fed's rate hikes are on pause when the number of job openings in the economy is soaring to unprecedented levels.

According to the BLS, job openings increased in a number of industries, with the largest increases in wholesale trade (+91,000), real estate and rental and leasing (+60,000), government (+59,000) and information (+42,000). The job openings level decreased in other services (-98,000), retail trade (-97,000), and arts, entertainment, and recreation (-40,000).

Adding to the unexpectedly strong labor picture to close the year, as job openings soared, the number of total hires also increased, rising by 95K in January to just shy of an all time high, and printing at 5.801 million. The hires level was little changed for total private and for government. The number of hires was little changed in all industries and all four regions. According to the historical correlation between the number of hires and the 12 month cumulative job change, the pace of hiring right now is precisely where it should be relative to the cumulative change in hiring.

Meanwhile, the so-called "take this job and shove it indicator", the quits level, also confirmed the latest labor market strength, rising by 99K to 3.490MM, and was little changed for total private but increased for government (+20,000). Quits increased in arts, entertainment, and recreation (+19,000) and in state and local government education (+17,000). Quits decreased in federal government (-6,000).

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 7.6 million open jobs on the last business day of
    January 2019.
    • Hires have increased since a low in June 2009 and have surpassed prerecession levels. In January 2019, there were
    5.8 million hires.
    • Quits have increased since a low in September 2009 and have surpassed prerecession levels. In January 2019, there
    were 3.5 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 1.1 million more hires throughout the month than
    there were job openings on the last business day of the month. In January 2019, there were 1.8 million fewer hires
    than job openings.