Time to make gainz

Daily Data: We're all caught up, and while that was fun, now we gotta scale new heights, asap

In today’s dispatch:

• labor market isn’t slowing down, because it was never moving quickly in the first place

• parity unlocked, status quo ante restored

• Now is the time for strength

• Healthcare (still) makes all the jobs

• Some optimism . . . white collar (jobs) on a white horse?

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Time to make gainz

The macro news this week was that job openings dropped quite a bit.

BLS

There are now ~8M job vacancies, down from ~8.3M a month before.

This ‘slowdown’ has caused some consternation and surprise, but not to Random Walk or long-time Random Walk readers.

Demand for workers has been flat for a long time. Job openings reflected the drawdown in the supply of workers—literal vacancies where workers once stood. That supply has been steadily replenished, mostly via the open border, and when you fill a hole, it gets shallower, until there is no hole.¹

Fewer job openings is no more surprising than a shallower hole.

Status quo ante restored

So what of the consternation around a ‘slow down’?

Well, it’s not wrong, so much as it is untimely. We’re not “slowing down,” because we weren’t moving quickly in the first place.

We were restoring parity, which it appears we have:

Indeed

The ratio of openings to available workers is basically back to what it was in 2019.

Labor shortage solved (for now).

OK, great, the declining job vacancy rate is no surprise. You did it, Random, you saw the future. The crowd goes wild.

Fair.

But, just because it’s not surprising, doesn’t mean it’s not a milestone worth noting.

Now that we’re all caught up, it means the substantial second-order effects of playing catch up (which have unfortunately been confused with strength) should come to an end, and having reached our destination, the question is “now what?”²

Do we sputter and stall, or do we push past the old waterline (and how quickly and by how much)?

We already know Cautious Consumerism abounds, and the White Collar Stagnation is real.

Is that the new normal, or have we just hit the inflection point we needed to start our engines again?

Now is the time for strength

These are pressing questions, really.

If the jobs vacancy rate keeps falling, unemployment will almost certainly follow: