The numbers for August are in, and it seems they are telling a happy story right now about employment and the US economy. The positive findings appear in the Bureau of Labor Statistics’ Job Openings and Labor Turnover Report (JOLT), which is an important report that does not get enough attention.
According to JOLT there were 7.14 million job openings in the USA in August, a record number. In July there were 7.10 jobs available, which was also an historic high. It seems right now is one of the best times in US history to be job hunting.
JOLT’s assessment is that the economy is running hot. August was the fifth consecutive month in which there were more jobs available than there were unemployed people to fill them. According to JOLT there were about 1.2 million more jobs than the 5.96 million unemployed. That has never happened before, at least not since series began in 2000. Also setting records is the number of new hires, which reached 5.78 million in August.
Workers are also feeling more confidence in the labor market in general. That story is told by what is known as the “quit-rate.” In August about 3.58 million workers left their jobs voluntarily, a sign, according to economists, that people feel they can take a chance and leave their old job in hopes of finding a new, better job. The number for August 2018 was up by 12.7% over last years “quit-rate” number.
According to the Bureau of Labor Statistics, the United States added 151,000 jobs to the job market, helping to bring the unemployment rate down to 4.9 percent.
The figure of 151,000 was lower than expected and was a sharp decline from the number of jobs that were added in December, which was 292,000. The lower figures were pushed down due to the loss of jobs in education and transportation.
General US economic growth slowed as well, down to an annual rate of only 0.7 percent during the last quarter of 2015. Third quarter growth was measured at 2 percent in 2015.
The statistics have investors worried, reflected in a downturn in the Dow Jones average which closed lower by 215 points, or 1.3 percent. For other investors the news is a sign that the Feds will most likely not raise interest rates.
“I’m a little surprised the markets reacted somewhat negatively to it,” said Sean Lynch at the Wells Fargo Investment Institute. “It is actually a pretty good number that should be welcomed by the equity markets, it takes some of the concern the Fed moves too quickly off the table a little bit.”
Although there are many analysts touting the new job numbers as some sort of cushion keeping the market from a crash on Monday, one should think again. The true numbers behind the government numbers factor in discouraged workers. These are workers that have stopped looking for jobs and collecting benefits. This pushes the true unemployment rate to 16.1 percent.
Now that is still a little bit lower than previous (yet still depression like), but one must take into count average duration of unemployment. This number rose for the third month in a row. The number is now at a record 40.4 weeks. This is about 10 months and has doubled from where it was when President Obama took office in January 2009. Making the news even more stark is the fact that the total number of unemployed for more than half a year is now 6.18 million, which is 130 percent higher than when Obama was sworn in.
QE3 To Make it Worse?
There are rumors that the Fed may actually start QE3, yet many analysts are wary of continued weakening of the US Dollar and now that the S&P has downgraded US sovereign debt, QE3 could have unknown negative consequences for the US bond market, interest rated and of course the already abysmal housing situation.