More Job Openings Than Unemployed Workers For Third Consecutive Month

There was a surprising development back in June, when that month’s JOLTS report revealed a curious, if welcome for the US economy, inflection point: for the first time in reported BLS data, the number of US job openings surpassed the number of unemployed workers.

Fast forward two months, when as the BLS reported last Friday, the number of unemployed workers increased from 6.0 million to 6.3 million (after hitting 6.6 million in July). The question was whether this increase would also reverse this Opening-Unemployed trend. However, as the just released June JOLTS report revealed, for the third month in a row the number of job openings stayed above the total number of unemployed workers, as May’s 6.638MM job openings number was revised higher to 6.659MM, yet which rose modestly again to 6.662MM in June which was once again comfortably above the 6.280MM unemployed workers. This means that June was the third consecutive month in which the number of job openings was higher than the number of unemployed Americans.

In other words, in an economy in which there was a perfect match between worker skills and employer needs, there would be zero unemployed people at this moment (which of course is not the case.)

According to the BLS, the number of job openings increased in educational services (+20,000) but decreased in transportation, warehousing, and utilities (-84,000). The number of job openings was little changed in all four regions.

Adding to the exuberant labor picture, while job openings remained above total unemployment, the number of total hires also remained just shy of a new record, at 5.561 million in June, down slightly from 5.747 million in May, and on the verge of an all time high. The number of hires s increased in finance and insurance (+31,000).

According to the historical correlation between the number of hires and the 12 month cumulative job change (per the Establishment Survey), either the pace of hiring needs to drop, or else the number of new jobs will rise significantly in the coming months.