Labor Market Continues To Tighten

Job openings (based on the JOLTS survey) increased by 289,000 in April to a seasonally adjusted 4.46 million, the highest reading since the summer of 2007. A measure of the demand side of the labor market, increasing job openings may be a welcome sign that slack in the labor market is trending down. According to a recent report from Deutsche Bank, there are currently less than four available people per job opening, which is down from ten in 2009 and close to pre-recession levels. The chart below shows the number of available people per job opening is back to its pre-crisis average. Labor market slack has been a popular topic for Federal Reserve Chairwoman Janet Yellen, who has frequently cited the number of long-term unemployed as a key concern. In addition, quit rates (workers voluntarily leaving their jobs), another signal of confidence in the labor market, have been increasing. This is particularly true for employees of smaller companies, which currently account for 90% of all job openings and are a driver of US employment.