US job openings’ relation to unemployment: Chart of the Day

US job openings fell to 8.06 million in the month of April, their lowest level in over three years as reported by the US Bureau of Labor Statistics’ Job Openings and Labor Turnover Survey (JOLTS).

Yahoo Finance’s Julie Hyman compares the patterns in job openings and the US unemployment rate over the past 24 years and how the employment data feeds into the Federal Reserve’s narratives around interest rates.

For more expert insight and the latest market action, click here to watch this full episode of Asking for a Trend.

This post was written by Luke Carberry Mogan.

Video Transcript

Per day out this morning, the number of job openings in the US fell to a three year low in April.

MARKET Now look into Friday’s May jobs report for the latest reading on the health of the labour market, and Julie Hyman joins me now with a close look at the relationship between jolts and jobs.

Indeed, job openings and then the unemployment rate.

That is our chart of the day today.

So what we have here is job openings as measured by that jolt survey.

That’s the purple line here, and we saw those job openings just over 8 million at the end of April.

And then you have the unemployment rate here, which is expected by economists to stay, have stayed steady last month at 3.9%.

So Jones obviously a little bit lagging in terms of when the data comes out.

But in terms of what it indicates here, it does tend to at least coincide, if not lead a little bit.

The upticks that we see in unemployment, that is what we have seen in the past.

They have, you know, they kind of are coincident here and once again here we have heading lower the unemployment rate, though it’s not necessarily seeing a big uptick at all.

I mean, this line looks pretty steady here up until now.

So is it going to show a more dramatic increase in the unemployment rate this time?

We don’t know yet.

But what it does show is that it’s in line with some of the other economic data we’ve been getting.

Whether it was manufacturing yesterday, where there are some of the recent spending and consumer confidence numbers that have been coming in a little bit weaker and hitting the bond market as we know pushing down yields and kind of causing a little bit of trepidation about where we are in terms of economic growth.

Josh and so Julie With with the big Fed meeting now on deck, how do you think Jay Powell was thinking through all this data?

I mean, it seems pretty clear that the Fed has been more focused on inflation than they have on what’s been going on in the job market.

I mean, this is even as again if you look at that unemployment rate, which hopefully will come up here in just a second here.

Story continues

So here’s the unemployment rate and you go take it all the way back here, going to, uh, late 2019.

Even if the unemployment rate is ticking up a little bit, it’s still at pretty historically low level.

So we don’t see a lot of concern being expressed by the Fed yet about that figure.

They are really laser focused on the inflation numbers.

And still we do see the trend that high and large, especially if you’re judging it by PC, which is the Fed’s preferred inflation measure, that there is some moderation in the pace of inflation.

I suspect who knows what J Powell is going to say.

I suspect we will get some version of.

We still need more good data showing us that that trend is intact.

But we shall see Julie.

I think that is a very good safe bet.

I agree.

Thank you.

Appreciate it.