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Job Market on the Mend - 8/22/14

The Labor Department’s monthly Job Openings and Labor Turnover Survey, otherwise known as JOLTS, recently supplied additional information indicating that America’s job market really is on the mend.  The number of unemployed job seekers per open position declined to 2.02 in June, the lowest level since April of 2008.  In other words, the chances of finding a job have gone up.  The ratio was 2.14 in May and is now actually below the average sustained from 2002 to 2006.

As reported by Reuters and others, the number of job openings, a measure of labor demand, increased to a seasonally adjusted 4.67 million in June, the highest level since February 2001.  The pace of hiring its now at its highest level since February 2008.  What’s more, job growth has exceeded 200,000 during each of the past 6 months, a winning streak last observed in 1997. 

The nation’s unemployment rate stands at 6.2 percent.  It started the year at 6.7 percent.  There is even evidence suggesting that the quality of jobs being added is improving, with job growth in mid-wage and high-wage segments accelerating recently.  While a tighter job market is most welcome, nothing is purely beneficial.  Ongoing labor market improvement could eventually trigger inflation and higher interest rates for borrowers.

Anirban Basu, Chariman Chief Executive Officer of Sage Policy Group (SPG), is one of the Mid-Atlantic region's leading economic consultants. Prior to founding SPG he was Chairman and CEO of Optimal Solutions Group, a company he co-founded and which continues to operate. Anirban has also served as Director of Applied Economics and Senior Economist for RESI, where he used his extensive knowledge of the Mid-Atlantic region to support numerous clients in their strategic decision-making processes. Clients have included the Maryland Department of Transportation, St. Paul Companies, Baltimore Symphony Orchestra Players Committee and the Martin O'Malley mayoral campaign.