Economy

Should Fewer Job Openings Curb Many of the Wage Inflation Fears?

Jon C. Ogg

Published: February 6, 2018 10:55 am

Last Updated: January 12, 2020 3:42 am

When the financial markets are in panic mode, it’s hard to get investors and economists to pay attention to lower-impact economic reports. Still, part of the issue hurting the stock market is a fear that wage inflation and a hot jobs market will stoke real inflation across the economy as a whole. What if this notion is already at risk?

The U.S. Department of Labor released its Job Openings and Labor Turnover Survey for the month of December. This so-called JOLTS report comes with a one-month lag, but it is still widely used by economists, employers and those seeking jobs as a barometer of the true strength of the jobs market.

The jobs market remains quite strong, but the number of job openings in December was actually at a seven-month low. The Labor Department signaled that there were roughly 5.81 million job openings on the last business day of December.

After having peaking above 6 million job openings for four consecutive months in mid-2017, the December 2016 total number of job openings was 5.54 million for a year-over-year comparison.

December’s job openings rate was 3.8%. Job openings increased by 33,000 in information and by 13,000 in the federal government. There were some notable decreases in job openings as well:

• Professional and business services (−119,000)
• Retail trade (−85,000),
• Construction (−52,000)

There were roughly 5.2 million hires and roughly 5.2 million separations in December. The very important quits rate was listed as 2.2% with 3.3 million quits, and the layoffs and discharges rate was 1.1% with 1.6 million layoffs and discharges.

The Labor Department also gave a clear sign about the 2017 jobs market:

Over the 12 months ending in December, hires totaled 64.7 million and separations totaled 62.6 million, yielding a net employment gain of 2.2 million. These totals include workers who may have been hired and separated more than once during the year.