The Flinchum File

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Another Good JOLT

Wall Street, politicians, and the media pay very close attention to the monthly “Jobs Report” on the first Monday of each month.  Announcing the rate of unemployment, it is the “headline news” on the labor market.

On the other hand, economists pay closer attention to the JOLT report, which stands for Job-Openings, Labor-Turnover.  An increasing number of job openings is always a good thing, of course, and an increasing labor turnover tells you the attitude and confidence level of workers.  Job openings can increase but workers may be too afraid to give up their current jobs to look for another one.  How do you measure the amount of worker confidence?  Look at labor turnover.

The latest report shows about 5.6 million open jobs, which is the highest level this century.  In addition, about 3.2 million workers gave up their jobs, which is the most since 2001.  The labor market is solid.  (Even President Trump admits the labor reports are no longer “fake.”)

Normally, a tight labor market would encourage the Fed to increase interest rates at a faster rate, but the average hourly earnings of workers is still not increasing enough to be inflationary.

A strong labor market with little indication of inflation is not a bad economy for a President to inherit . . . is it?