Yesterday’s JOLTS report from the Bureau of Labor Statistics revealed that Job Openings have hit a record high, (since the data has been recorded starting in 2000) of 6.044 million. While that sounds like a good thing, robust demand for labor and all, the challenge is that while companies have plenty of job openings, they don’t seem to be able to find the right person for the job, which is part of our Tooling and Retooling theme.
In fact, the number of Job Openings first became greater than the number of Hires back in August 2014 and has been rising overall since then. This is not a terribly good sign because when companies have positions they cannot fill, that reduces the overall productivity of the businesses. When positions remain empty for months, or maybe even years, everyone needs to work around the void, impacting their overall ability to take care of their workload.
Given the significant advances made in technology across a wide range of applications, we suspect that this disconnect between skills available and skills needed will continue. This creates opportunities for those companies that can bridge that gap, either by offering training for those potential employees that are the closest fit or those that look to provide this service for a fee, paid either by the job seeker or those companies desperate to fill positions.
It isn’t just Job Openings that are in record territory.
The weekly initial claims report tends to be rather volatile, which is why we prefer to look at the 4-week moving average, so as to smooth some of those bumps out but still give us rather high-frequency trend data. As you can see in the chart below, we are at levels not seen in forty-four years. The only two times this metric has been lower since the data has been recorded was in 1973 (221,250) and 1969 (179,750), which are 16,750 and 58,250 below the most recent data at 238,000. Keeping in mind that this statistic has dropped by over 55,000 since February 21st, we are likely to be nearing the low for this cycle.
