Jobs Galore

J: The US economy posted a new milestone for employment opportunities at the end of 2019. On February 12, the BLS told us that on December 31, 2018, employers of all types all over the country had a record 7,335,000 job openings on a seasonally adjusted basis.

That not only exceeded the old record of 7,293,000 job openings in August, but also was a phenomenal 1,666,000 more job openings (29.4 percent) than were reported just one year earlier.

As the chart shows, this marks the ninth consecutive month in which the total number of job openings exceeded the total number of people who were unemployed and looking for a job (6,294,000 people). Until April 2018, such a situation had never occurred since the inception of the JOLTS data in December 2000.

The chart also makes clear just how unusual this excess of the supply of jobs is compared to the demand. For example, look at the enormous gap between the two series back in October 2009, not long after the recession ended that June. Then there were only 2,400,000 jobs open for the 15,352,000 people who were unemployed and looking to find a job. The number of unemployed people has fallen by more than fifty percent since then. That is an enormous feat of job creation.

One of my favorite parts of the JOLTS report is the data on hires and separations for the entire year. During 2018 there were 68.5 million hires and 65.9 million separations. Thus, there were 134.4 million employment changes made in order to net an increase of 2.6 million nonfarm payroll jobs for the year. That is an amazing account of “job churn.”

There were job openings in all the different categories reported by the BLS. There were 6.7 million openings in the private sector and 628,000 in all levels of government. With such an unprecedentedly bright job picture, it is no surprise that consumer confidence remains at a very high level on all measures. Disposable personal income keeps following employment to new record levels every month.

Since personal consumption expenditures are by far the largest category of GDP (about 70 percent), you should expect to see new record levels of GDP for every quarter of 2019. Keep watching these data. There will eventually be another recession, but it’s not likely to appear in 2019. Meanwhile, the current expansion will become the longest one ever on June 16. That is when it will begin its remarkable eleventh year.