May 02, 2023 | 10:33
U.S. Job Openings Closing.... Sort Of
It's ok! It's ok! Seeing the headline that "US job openings fall by more than forecast to 9.59 Million" is a good thing. Well, not normally but that is still over 9½ mln jobs available out there which, compared to almost 6 mln unemployed Americans.... well, that is still a heck of a lot of jobs available.
But availability is coming down. Remember the peak of over 12 mln in March 2022. And, we had a streak of 20 months in a row of over 10 mln jobs, then 9.974 mln in February, and now, a 23-month low of 9.590 mln in March. Businesses are still finding it challenging to fill roles, but less so now, which is good ultimately for inflation. So employers are either 1) taking openings offline because of slower demand (anticipated or realized) or 2) filling them. Digging a little deeper, it appears that the answer is (1) as hirings were flat. See Chart 1.
However, for all of Q4, the percentage decline in job openings was a little startling. See Chart 2 for the visual. This is a fairly youthful series (as in, it only began in 2000) but the 14.6% dive in openings was the second largest in its history, surpassed only in 2009.
Note that not every major industry was pulling back its job ads. Leisure & hospitality (yes, it is still happening here) and the government were the two major areas which saw an increase in openings. See Chart 3.
But perhaps fears of recession (it is coming) and fewer job openings (it is happening) are prompting workers to stay put and give the job another go. The number of quits continues to decline. See Chart 4.
Bottom Line: No matter how you slice/dice it, the labor market is still tight. But it is getting a little less so with each passing day. And as that happens, price pressures start to ease a little too, which is what monetary policymakers want to see.