Labor Market Regains Momentum
The latest Job Openings and Labor Turnover Survey from the Bureau of Labor Statistics shows the number of open positions in the economy was up slightly in October to 7.267 million, just below the record-high 7.626 million in November 2018. Private job openings in the United States totaled 6.523 million in October versus 6.314 million in September (see top chart). The industries with the largest number of openings were professional and business services (1.183 million), health care (1.145 million), retail (866,000), and accommodation and food services (839,000).
The job-openings rate, openings divided by the sum of jobs and openings, rose to 4.8 percent for the private sector, below the all-time high of 5.2 percent reached in October and November 2018, but still a very high level historically (see top chart). The highest openings rates were in accommodation and food services (5.5 percent), transportation, warehousing, and utilities (5.4 percent), health care (5.3 percent), and professional and business services (5.2 percent).
A further sign of labor-market strength may be seen in the number of quits, which likely reflects confidence in the labor market. Quits totaled 3.333 million for the private sector in October versus 3.288 million in September (see bottom chart). The layoffs rate, another key indicator for the labor market, fell to 1.3 percent for private employers, and is consistent with the historically low initial claims as a percentage of employment. Combined, the high number of openings, the high openings rate, the high quits rate, and the low layoffs rate all suggest the labor market remains very tight.
Overall, the data relating to the labor market are showing renewed strength. Despite increased uncertainty due to erratic policies, the economy continues to expand, led by consumers and the labor market.
Robert Hughes
Robert Hughes joined AIER in 2013 following more than 25 years in economic and financial markets research on Wall Street. Bob was formerly the head of Global Equity Strategy for Brown Brothers Harriman, where he developed equity investment strategy combining top-down macro analysis with bottom-up fundamentals. Prior to BBH, Bob was a Senior Equity Strategist for State Street Global Markets, Senior Economic Strategist with Prudential Equity Group and Senior Economist and Financial Markets Analyst for Citicorp Investment Services. Bob has a MA in economics from Fordham University and a BS in business from Lehigh University.
