Job openings surge to a record high
Job openings in America are at a record high.
The latest Job Openings and Labor Turnover Survey showed that job openings jumped to 5.75 million in July, the highest since the series began in December 2000.
This crushed economists' expectations for a print of 5.3 million.
The quits rate, which reflects people who are comfortable leaving their current jobs, came in at 1.9% for a fourth straight month. The layoffs and discharges rate fell to 1.1%.
This report is one of Federal Reserve chair Janet Yellen's favorites to assess the pulse of the labor market. And its meeting next week, the JOLTS report will be one of the things the Fed weighs as it decides whether to raise rates for the first time in nine years.
The pace of jobs growth has been solid, overall, in recent months. Although Friday's jobs report for August came in below expectations, at 173,000, it is likely to be revised higher, according to economists. Meanwhile, we learned the unemployment rate fell to a seven-year low of 5.1%.
The big laggard in the labor market during the recovery has been wage growth.
In a note to clients, Pantheon Macroeconomics' Ian Shepherdson wrote:
The surge in the number of job openings in recent months is now taking on epic proportions, with the three-month annualized rate now at 35% and accelerating. The data - in absolute terms, and relative to the level of unemployment and the population - now signal unambiguously that the labor market is unable to supply the people companies need. Usually, that means wages will accelerate, though the evidence for that now is mixed. The JOLTS report also showed that the number of hires fell slightly in July to 5 million, and the hires rate was 3.5%.
Here's the latest chart of job openings:Thomson ReutersAnd via Shepherdson, this chart shows that job openings as a percentage of the working-age population is surging, and at the highest level in over a decade.
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