As everyone knows, the labor market has been quite strong, with expectations for the unemployment rate to fall further next week. Much has been made of the relationship between job openings and unemployed people that are in the labor force. The ratio of job openings to unemployed workers is almost 2x, a level far above anything we’ve ever seen before.
JOLTS data, which is the source for job openings, is relatively stale data. As of this writing, we are still working with March job opening data. Has anything changed in the last couple months to change this trend? We try to answer this question by looking at some market oriented stats that tend to have a good relationship with job openings.
First, breakeven inflation has rolled over. The extent to which the 5-Year US Treasury breakeven inflation rate has fallen suggests a real-time range of 10-10.5 million, some 1-1.5 million below March’s data.
Second, the Human Resources sub-industry in the S&P 500 is down some 30% since its January peak. As one would imagine, the HR industry is a pretty good leading indicator of job openings since they make more money the more jobs they fill.
