There were 10.458 million job openings across the US economy on the last business day of November, crucial data released on Wednesday showed.
That was barely lower than the prior month, and far more than the 10.05 million economists predicted.
Arguably, the headline print from the government’s JOLTS report is now the most important macro data point on the planet. The Fed desperately needs to rebalance the labor market in order to bring wage growth down to levels consistent with its inflation target.
To the extent the soft landing narrative is still viable, it hinges almost entirely on the idea that by moderating consumption, the Fed can render millions of job openings superfluous, thereby bringing demand for labor more in line with the supply of workers, all without too many Americans actually becoming unemployed. Wednesday’s data suggested little progress.
Hires were virtually unchanged, leaving the gap near the widest levels on record. In a testament to how predictably intractable this has become, I penned most of the copy above prior to the release.
Headed into the new week, I wrote that “although there are very convincing arguments for the contention that matching efficiency is irreparably impaired, it’s difficult to imagine a scenario in which at least some of the millions upon millions of excess job openings that currently exist across the economy don’t disappear in 2023.” We won’t have a JOLTS report for a 2023 month until March, so that pseudo-prediction stands, but I’ll be the first to concede that each report which passes without demonstrable progress is an incremental blow to the soft landing narrative.
Apropos, the quit rate ticked higher in November to 2.7, an unwelcome development indicative of more labor churn. The rate was 2.6 in October, the lowest since May of 2021. November’s increase was the first since February.
The number of quits rose to a three-month high at nearly 4.2 million. Layoffs were little changed near record lows.
The quit rate in leisure and hospitality remained convincingly above 5%, as another 861,000 people left a job in the sector in November. Remember: Services is where the inflation lives, and ongoing labor churn won’t help. The quit rate in accommodation and food services was 5.7%. More than a million workers quit a job in trade, transportation and utilities over the month.
I doubt there’s much to be gained from additional editorializing. Wednesday’s JOLTS data suggested the Fed has a long way to go when it comes to rebalancing the labor market. Of course, we already knew that. But every reminder is painful for markets.
