Dear Reader,
According to Bureau of Labor Statistics data, there were 11.4 million job openings in April.
This is down from the record-high of 11.855 million set in March.
This also means there were 1.92 job openings per unemployed person in April, down marginally from a record high of 1.99 in March.
While the gap between job openings and unemployed people remains very high, the slight decline could be another sign that the labor market is cooling.
For job seekers, this is not a positive development. But this looks like good news for policymakers, consumers, and others hoping for inflation to cool.
The decline in job openings and the narrowing gap relative to the number of unemployed people could be signs that the Fed is getting what it wants.
Tom Porcelli, the chief U.S. economist at RBC Capital Markets, observed that changes in the labor market differential have historically had a pretty tight correlation with changes in the unemployment rate.
Specifically, the unemployment rate goes up when the labor market differential has gone down.
The bottom line is while declining job openings and deteriorating sentiment toward the labor market aren't the kinds of developments typically worth celebrating, they are precisely what policymakers are aiming for.
They should help slow wage growth, which in turn should help cool inflation.
To be clear, the labor market continues to be very hot.
And one month's worth of data does not confirm the beginning of a trend. It'll be months before we can know that.
What matters is that the data hasn't gotten much hotter. And if the Fed is right, all of this should soon have a cooling effect on inflation.
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