Torsten Sløk, the chief international economist at Deutsche Bank, thinks the US labour market is hot — maybe too hot.
In a note on Monday, Sløk took exception to the idea that there is underlying labour market slack in a pool of workers waiting outside of the labour market. Federal Reserve Chair Janet Yellen has even noted that there may be a group of people who are listed as outside the labour market that want to find a job but have been discouraged.
“It is harder to fill a job today than in 2006 when the economy was overheating, see the first chart below,” wrote Sløk. “
If there really is a significant number of workers available outside the labour market to come in and take jobs why are companies then saying that they cannot find workers?” (emphasis his)
Sløk noted that the number of job openings means the US is “already at full employment.” Additionally, Sløk noted that the number of people holding multiple jobs is also at its highest point since the recession.
“Similarly, the number of workers holding two or more jobs is at a cyclical high, this is normally also a reflection of an overheated labour market,” concluded Sløk.
To be fair, the record number of unfilled job openings has also been blamed on a possible mismatch between the training and skills that available workers have and what companies are looking for. Basically, there are more people to hire but they don’t have the right skills.
While this isn’t necessarily a bad thing, as a tight labour market usually leads to increases in wages for workers, it does have implications for future Fed actions.