For the eighth consecutive month, there were more jobless than job openings across the world’s largest economy.
That was the main takeaway from Tuesday’s BLS update, which showed total vacancies on the last business day of February were 6.882 million, just a touch below consensus.
The figure below shows you the jobs/jobless ratio which, for the better part of two years, was a veritable obsession for the Fed.
When there are more job openings than “officially” unemployed (i.e., a ratio above 1.0), demand for labor exceeds supply, putting upward pressure on wages. In acute scenarios, that risks inflation. And vice versa. The chart tells you that since last summer, the supply of labor outstripped demand for workers, a disinflationary backdrop, at least in the labor market.
(As a technical side note: October’s ratio is unknowable. The BLS couldn’t conduct the household survey during the government shutdown. Without that data point, it’s impossible to calculate the jobs/jobless ratio. So when we say “eighth straight month” we’re making an assumption about October.)
The other standout from Tuesday’s JOLTS release: The hiring rate.
As the figure shows, 3.1% is the lowest since April 2020, which is to say since the original pandemic shock.
If you don’t count April of 2020 (which you shouldn’t, for obvious reasons), February’s hiring rate was the lowest in more than 15 years.
As usual, economists blamed bad weather. Cold weather. In February.
I’m waiting for the time economists blame a print on good weather.
“New home sales surprised to the upside in May, printing above the highest estimate from any economist. The data should be taken with a grain of salt however, as it was absolutely gorgeous outside.”
Yeah, and I mean beyond the obvious jokes, the whole point of polling economists is that they’re supposed to factor this stuff in. If the weather’s especially “extreme” during a given month, consensus should incorporate that, by definition. What else are these people doing all day if not adjusting their models for the on-the-ground reality?