Should Fewer Job Openings Curb Many of the Wage Inflation Fears?

When the financial markets are in panic mode, it’s hard to get investors and economists to pay attention to lower-impact economic reports. Still, part of the issue hurting the stock market is a fear that wage inflation and a hot jobs market will stoke real inflation across the economy as a whole. What if this notion is already at risk?

The U.S. Department of Labor released its Job Openings and Labor Turnover Survey for the month of December. This so-called JOLTS report comes with a one-month lag, but it is still widely used by economists, employers and those seeking jobs as a barometer of the true strength of the jobs market.

The jobs market remains quite strong, but the number of job openings in December was actually at a seven-month low. The Labor Department signaled that there were roughly 5.81 million job openings on the last business day of December.

After having peaking above 6 million job openings for four consecutive months in mid-2017, the December 2016 total number of job openings was 5.54 million for a year-over-year comparison.

December’s job openings rate was 3.8%. Job openings increased by 33,000 in information and by 13,000 in the federal government. There were some notable decreases in job openings as well:

  • Professional and business services (−119,000)
  • Retail trade (−85,000),
  • Construction (−52,000)

There were roughly 5.2 million hires and roughly 5.2 million separations in December. The very important quits rate was listed as 2.2% with 3.3 million quits, and the layoffs and discharges rate was 1.1% with 1.6 million layoffs and discharges.

The Labor Department also gave a clear sign about the 2017 jobs market:

Over the 12 months ending in December, hires totaled 64.7 million and separations totaled 62.6 million, yielding a net employment gain of 2.2 million. These totals include workers who may have been hired and separated more than once during the year.

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