US job openings fell more than expected to reach a new three-year low in key data released Tuesday.
There were 8.06 million open positions on the last business day of April, the BLS said. That was far fewer than expected.
The prior month’s headline was revised lower to 8.36 million from an originally-reported 8.49 million.
Hires were effectively unchanged thanks to a sharp upward revision to March’s total. The gap thus narrowed meaningfully for a second month.
Although I still believe we’ve reached the point of diminishing returns in terms of how much incremental disinflation we can outsource to the JOLTS headline, I’d be remiss not to call this progress. Generally speaking, fewer job openings should mean less wage pressure as competition for scarce workers recedes. Cooler wage growth is conducive to cooler consumer price growth. Or so goes the narrative. Openings are 830,000 lower than they were in December and 4.12 million off the highs.
That said, quits actually rose in April to 3.5 million from 3.3 million the prior month.
The quit rate was unchanged, at 2.2. March’s rate was revised up, consistent with an upward revision to total quits for that month.
Renewed downward momentum for job openings will almost surely offset the stalled quit rate in the minds of market participants and Fed officials, particularly given that the latter had already returned to pre-pandemic levels.
Plugging the headline JOLTS print into the openings/unemployed ratio gives you 1.24, the lowest (i.e., “best”) read on a key “immaculate disinflation” metric since June of 2021.
Fed needs to start cutting soon. Real time data is suggesting this. It will be really interesting to see if payroll data confirms the slowing narrative on Friday. The cyclical effects of fiscal policy stimulus slowing and the pandemic normalizing is suggesting this. Growth appears to be slowing. Not calling a recession but if the fomc stays at this level too much longer that’s what we will get. Time for Powell to step up and lead and not blindly follow backward looking data.
Will be interesting to see which mandate the FOMC prioritizes, should the two mandates conflict. In his terse Jackson Hole speech a couple years ago, Powell made it clear that the inflation mandate trumped the full employment mandate, but that was with inflation much higher, FF much lower, and pre-SVB. Today, I wonder if sustaining high employment might not take precedence.