There Are 1.4 Job Openings For Every US Job Seeker (Allegedly)

If you’re jobless, but searching for work, there’s an open position for you. In fact, you could have 1.4 jobs if you were so inclined.

That’s one way to look at the latest JOLTS data, out Friday.

On the last business day of September, the ratio of job openings to people unemployed and looking for work was the highest on record (figure below), again suggesting the US labor market is severely off-kilter.

It was the fifth consecutive month that the number of job openings exceeded the number of Americans counted as unemployed.

I’d be remiss not to note that there are countless suffering souls working three jobs just to sustain themselves and their families, a fact that often gets lost in the debate over labor “scarcity.”

Additionally, these are aggregates and statistical measures of unemployment can be deceptive. Simply declaring that there are 1.4 jobs for every person counted as statistically unemployed in America ignores virtually all nuance.

In any event, job openings fell 191,000 in September to a still wildly elevated 10.44 million. That was more than the 10.3 million economists expected.

Hires were little changed from the previous month at 6.4 million. The gap remained near record wides (figure below).

Recall that September was supposed to be the month when the receding Delta wave, school re-openings and the expiration of emergency pandemic unemployment benefits combined to “force” workers off the sidelines. Plainly, that thesis didn’t pan out.

Notably, the quit rate hit yet another new record at 3% (figure below). 4.4 million people quit in September.

The layoffs rate loitered near all-time lows. The number of people fired or laid off fell by 180,000 versus September of 2020.

“This feeds the narrative that companies are paying up to compete for staff in an environment where labor supply is tight with firms also increasingly paying staff more to retain them,” ING’s James Knightley remarked.

Of course, it also speaks to the fact that with the cost of living on the rise, workers will demand commensurate pay raises or else they’ll simply walk away. And by all indications, they aren’t giving their employers much time to deliberate. (“Pay me or I’m walking — today.”)

If wages keep rising, it could feed inflation, but as noted here on Friday morning, the hope is that wage increases prove “sticky” while elevated consumer prices eventually abate, leaving workers better off down the line. It’s just a matter of how long that takes.

For businesses, margin erosion looms, although robust demand allowed corporate America to pass along higher wage and input costs to consumers in Q3.

I scarcely need to editorialize around Friday’s data any further. Everyone who considers themselves a macro watcher can recite the boilerplate copy from memory.

“It was hoped that rising vaccination rates, children returning to school and the expiration of enhanced jobless benefits would turn this situation around,” Bloomberg’s Alyce Andres wrote. “It hasn’t.”