Good Morning!
Today, we look at two conflicting reports on the labor market.
On Wednesday, the latest Job Openings and Labor Turnover Survey-or JOLTS as it’s better known-showed a record 9.21 million job openings in the U.S. as of the last business day in May. The JOLTS reports go back to December 2000. That’s almost one available job for each of the 9.5 million unemployed persons in the country.
A record low was reached for the number of layoffs, while the number of people quitting their jobs remained just below the record high set in April.
You combine this news with the great June employment report delivered last week, and the labor market sounds pretty awesome right now. If only it was that simple. To see why it’s not that simple, see the next piece.
We found out yesterday, that weekly jobless claims unexpectedly rose to 373,000 last week. Not a big increase from the prior week’s revised figure of 371,000, but higher than the 350,000 forecast.
The big question is how can initial claims for unemployment be rising when:
- The U.S. added 850,000 jobs last month.
- There are almost as many job openings as unemployed persons.
- Companies keep offering higher incentives to attract workers.
Wish I had a good answer for that, but here are some possible explanations:
- The data above is collected in different ways, from different sources.
- Weekly data, such as jobless claims, can be volatile from week to week.
- The JOLTS report data was collected over a month ago.
Probably a bit of each, but whatever it is, markets are now worried that economic growth may have already peaked. I say, “So what?” GDP probably grew at around an 8% annual rate last quarter, which is certainly a level that can’t be sustained.
We can’t read too much into any one data point, as markets will be jumping around every time more news comes out. The real story is the amazing comeback we’ve made in the past year, and the bright future ahead.