Due to tightened monetary policy, the count of total job openings for the entire economy has trended lower over the last year. This is consistent with a cooling economy that is a positive sign for future inflation readings. However, the number of open jobs for the aggregate economy was relatively unchanged in February per the Bureau of Labor Statistics Job Openings and Labor Turnover Survey (JOLTS).
In February, the number of open jobs for the economy ticked up to 8.76 million. This is lower than 9.85 million reported a year ago. NAHB estimates indicate that this number must fall back below 8 million for the Federal Reserve to feel more comfortable about labor market conditions and their potential impacts on inflation.
While the Fed intends for higher interest rates to have an impact on the demand-side of the economy, the ultimate solution for the labor shortage will not be found by slowing worker demand, but by recruiting, training and retaining skilled workers. This is where the risk of a monetary policy mistake had some risk of arising. Good news for the labor market does not automatically imply bad news for inflation.
The number of open construction sector jobs increased for the most recent data, rising from 425,000 in January to 441,000 in February. The count was 409,000 a year ago during a period of weaker home construction. The construction job openings rate increased slightly to 5.1% in January. The recent, increasing trend for unfilled construction jobs indicates an ongoing skilled labor shortage for the construction sector.
The construction sector layoff rate increased to 2.6%, compared to 2.1% a year ago, an indication of some labor market churn. The hiring rate increased to 4.9% in February, compared to 4.7% from a year ago.
