24/7 Wall St.

The week of October 14 brought several readings on jobs. The jobless claims data continues to look stellar, but the rest of the core readings show a jobs market that is far less robust than it was just a few months ago.

24/7 Wall St. has tied several of the key jobs reports in an effort to show both sides of the coin here on the U.S. jobs market. Right now the balance is weaker rather than stronger, but that weakness may be far from that we have seen in prior period of weakness. It is crucial to understand that focusing on just one report will never give you the full picture.

In the week ending October 8, the seasonally adjusted initial claims reading from the Bureau of Labor Statistics (BLS) was 246,000. This marked 84 consecutive weeks in which initial claims were below 300,000. That is the longest sub-300,000 claims streak since 1970.

The BLS reported that the monthly Job Openings and Labor Turnover Survey, the so-called JOLTS report, showed fewer job openings. That report has a one-month lag and was an August reading, but it still confirms other mixed to weak jobs data.

The total number of job openings was 5.443 million in August. July’s total job openings were revised lower, from 5.871 million to 5.831 million. That represented a 6.65% drop in openings, and hiring slowed by almost 1% in August. Hires were 5.2 million and separations were 5.0 million, and the number of job openings fell to 3.6% in August from 3.9% in July.

What should stand out from the latest Employment Situation report from the BLS was that the six-month average of payrolls gains was the slowest reading going back to 2012, and the interpolated JOLTS report would suggest that the number of job openings is the lowest since last December.

The FOMC’s minutes from September, released just this last week, said that the labor force participation rate and the employment-to-population ratio had edged up since June. On wages, the committee said in the minutes:

Compensation per hour in the business sector rose 2 percent over the four quarters ending in the second quarter, the employment cost index for private workers increased 2-1/2 percent over the 12 months ending in June, and average hourly earnings for all employees increased 2-1/2 percent over the 12 months ending in August.

Another consideration here is that small business optimism slipped again in September. That may not be a formal jobs number, but by and large the growth ahead is more likely to be seen from small businesses than large ones.

It is easy to take one argument now, but again we need to remember that there are two sides to each coin. Some economists will say these numbers still look healthy. Others will point out that they are lower. It just seems very hard to argue that the jobs market is heading into the abyss. Still, it is not hard at all to argue that the best part of the jobs market looks like it peaked several months ago.

Maybe — a serious maybe — some of the weakness remains around the outcome of the presidential election and how the balance of the Congress turns out.

Keep in mind that the Federal Reserve is saying that the U.S. economy can still improve, but it is not at or close to what they consider “full employment.” Now if they can just get the public convinced that 2% inflation is coming, then they can finally get another rate hike they want to make.