Job Openings Continue Swelling

Job openings keep swelling, to a record 7.136 million in August which easily exceeds Econoday's consensus range. The rise underway is underscored by an upward revision to July which is now well up at 7.077 million vs an initial 6.939. Also underscoring the surge is the comparison with last August which was at 6.044 million for an 18.1 percent gain.

The comparison that's most critical here is the number of unemployed actively looking for work, a number that is also compiled by the Labor Department and which stood at 6.234 million in August before moving sharply lower in the September employment report to 5.964 million. This gap between job openings and job seekers, which first opened up earlier this year, is hard evidence that labor is scarce.

Other readings in today's JOLTS report for August include a modest gain in the number of hires, to 5.784 million vs July's 5.713 which also is far below the number of openings. The number of quits are closely tracked in this report as an early indication of wage inflation. But there's no indication that workers are being pulled to higher paying jobs as quits slipped in the month to 3.577 million from July's 3.608 million.

Jerome Powell concedes that it's a mystery why wages haven't been going up very much as demand for labor grows and the supply of labor declines. Yet sooner or later, the law of supply and demand is bound to assert itself, at least this is the risk that the Fed is guarding against in its rate-hike regime.