While we eagerly await the JOLTS report to see how the job opening are doing, we also keep a keen eye on the labor participation rate. On JOLTS:
The number of job openings decreased to 8.7 million on the last business day of October, the U.S. Bureau of Labor Statistics reported today. Over the month, the number of hires and total separations changed little at 5.9 million and 5.6 million, respectively. Within separations, quits (3.6 million) and layoffs and discharges (1.6 million) changed little. This release includes estimates of the number and rate of job openings, hires, and separations for the total nonfarm sector, by industry, and by establishment size class.
Source: BLS.gov
The JOLTS shows a modest decrease in open jobs but at a whopping 8.7 million jobs open there is still a long way to go especially when the labor participation rate still hasn’t recovered from pre-COVID high.
In October of 2019, the labor participation rate was at 63.3 and in October of 2023 it was 62.7 and the overall trend isn’t very optimistic.
Don’t forget that social security has 71.4 million recipients and that number is expected to grow above 80 million by 2030 which means 9 million less workers participating in the labor force.
The good news in all of this is that labor productivity is up and labor costs are down according to the BLS.
Nonfarm business sector labor productivity increased 5.2 percent in the third quarter of 2023, the U.S. Bureau of Labor Statistics reported today, as output increased 6.1 percent and hours worked increased 0.9 percent. (All quarterly percent changes in this release are seasonally adjusted annual rates.) The increase in labor productivity is the highest rate since the third quarter of 2020, when productivity increased 5.7 percent. From the same quarter a year ago, nonfarm business sector labor productivity increased 2.4 percent. (See table A1.) Unit labor costs in the nonfarm business sector decreased 1.2 percent in the third quarter of 2023, reflecting a 3.9-percent increase in hourly compensation and a 5.2-percent increase in productivity. Unit labor costs increased 1.6 percent over the last four quarters. (See tables A1 and 2.)
Source: BLS.gov
We continue to wait for a market correction and continue to buy short term T-bills to earn 5.3 percent on our cash so stay tuned, stay profitable and stay solvent…