The latest job openings and labor turnover survey (JOLTS) from the Bureau of Labor Statistics showed that there were 7.488 million job openings in America in March (lagged release). That was a significantly larger increase than anticipated from February’s upward-revised print and the 4th-highest reading on record. Notable gains in job openings occurred in the transportation, warehousing, and utilities (+87,000), construction (+73,000), and real estate and rental and leasing (+57,000) sectors. Total hires, though, edged lower in March to just 5.660 million, therefore remaining below total openings for the 51st consecutive month.
This is consistent with the cooling in nonfarm payrolls growth that we have suggested should occur in a tight labor market where employers are having a difficult time finding suitable workers for the positions they are trying to fill. Moreover, the number of unemployed Americans per job opening ended March at 0.85, the 13th month in a row that total vacancies have exceeded the number of job seekers in this country. Further, the ratio of quits to layoffs and discharges, an indicator of U.S. workers’ willingness to give up their current job security for better employment opportunities, climbed to 2.01 in March, fractionally below the all-time high hit at the start of the year. Although supportive of wage growth and improved benefits offerings, this environment can also lead to greater consumer inflation as businesses try to pass on the rising cost of labor. Higher productivity growth, though, has helped keep inflation in check recently.
Elsewhere, a separate report from the Federal Reserve Board of Governors showed that total consumer credit outstanding rose by $10.28 billion in March (lagged release) to $4,052.11 billion. Although that was the 4th straight month that total consumer credit has exceeded $4 trillion, it was also the smallest monthly gain since December and driven entirely by student and automobile loans. In fact, non-revolving credit rose by $12.46 billion in March while revolving credit, which is mostly consumers’ credit cards, actually declined by $2.18 billion. Year-over-year revolving credit growth also continues to trend lower, and some banks appear to be tightening their lending standards even though interest rates have fallen. Add to all of this the recent declines seen in Americans’ personal saving rate and it seems more likely that faster wage growth will be needed to sustain consumer spending.
Sources: Econoday, U.S. DoL, FRBG, FRBSL
Post author: Charles Couch