A couple of weeks ago, the Bureau of Labor Statistics (BLS) issued their March JOLTS (Job Opening and Labor Turnover Survey) report showing a continuing increase in job openings. Below is a Federal Reserve historical graph incorporating the latest March data.
Graphing the quarterly data evens out the monthly fluctuations and shows the upward trend.
While the trend is upward, we have come from a deep trough and we still have a long way to go to get to a healthy job market. The number of job openings is about the same as in 2004 but the population has grown by 20 million since 2004.
The stock market is inextricably chained to the labor market. In the graph below, we can see the similarity in trends between the S&P500 and the job openings.
The stock market attempts to anticipate the health of the job market. In the spring of 2006, job openings halted their decline then rose and the market resumed upward in anticipation of a continued climb in job openings. As job openings reversed and resumed their decline in 2007, it was a harbinger of the coming economic cliff.