00:00So this is really good data.
00:02It is really good data.
00:03Look, the consensus was expecting a small decline.
00:05We expected just an 85,000 uptick in total vacancies,
00:10and we get instead 730,000 uptick.
00:13But I want to dive in just a little bit deeper
00:15because almost all of that is concentrated
00:17in professional and business services.
00:19There's also a pretty significant increase
00:22in some of the more secularly driven industries
00:25like healthcare and social assistance,
00:27downstream of demographics,
00:29also pretty notable that there's a decline
00:31in accommodation in food services,
00:33one of the items that's most cyclically sensitive.
00:35So where you see a lot of the increase
00:37is healthcare and social assistance,
00:40which is very much so just downstream of demographics.
00:44It's mostly just a structural issue
00:47where there's any sort of cyclical sensitivity,
00:50something like leisure and hospitality.
00:51We're seeing a little bit of weakness.
00:53And just to zoom out and factor in this month's major number,
00:57professional and business services,
00:59we're supposed to be seeing a lot of crowding out of jobs from AI.
01:03We're supposed to see a lot of the professional and business services jobs AI'd away.
01:08Instead, we're seeing some additional labor demand, I guess,
01:11as firms reassess how much labor they actually need
01:14as they start incorporating AI tools into their business.
01:17That is a really interesting point
01:19and maybe helps to alleviate some of the worst of fears.
01:21We'll see how long that lasts.
01:22But the fact that it's a very concentrated jobs gain in things like healthcare,
01:28I mean, that's really been a factor of this jobs market for the past year and some change, hasn't it?
01:32It totally has been.
01:34This is not a job market where you could say there's a lot of labor market dynamism.
01:38We see that again this month at the quits rate.
01:40If we see a lot of labor market dynamism, if workers have a lot of opportunities out there,
01:46they start quitting.
01:47Instead, we're seeing a decline in the quits rate.
01:49So if we're seeing a decline in the quits rate, if we're seeing concentrated vacancies,
01:54if we're seeing concentrated hiring, it does not speak to broad-based wage growth here.
01:59As much as I like to get favorable economic data, like a $730,000 increase in total vacancies,
02:05it's not broad-based enough.
02:08There isn't enough breadth throughout the labor market to suggest that wage growth
02:13and so aggregate labor income growth and personal income growth are going to be rising.
02:18Instead, over the first four months of this year,
02:20we've seen nominal aggregate labor income growth running at an annualized pace of just about 3.5%.
02:26Workers' income growth, while about consistent with 2% inflation,
02:31is being swamped by the supply shock-induced inflation that we're getting from both tariffs,
02:38chip shortages, and the global energy shock.
02:40So just to be clear, right, we're talking about job openings here.
02:43It's not that they're adding jobs.
02:45This economy is needing people to fill jobs that they don't have.
02:49And I'm guessing in health care, that's like working in a hospital in a menial task.
02:56Not as the top orthopedic surgeon, right?
02:58Or working in an old folks' home to help take care of the growing sort of gray part of this
03:05citizenry.
03:08Our population is getting older.
03:09Exactly.
03:10But the professional services, business and professional services, what is that?
03:14Is that back office work?
03:15Is that like secretarial work?
03:17Or is it like, you know, AI teaching?
03:21It includes legal professions.
03:23It includes accounting services.
03:25It includes administrative services.
03:27It includes management services.
03:29So part of it is that these are folks that you should see getting hired during a cyclical upswing.
03:36But these are also the people who are most exposed to AI replacing them in the workforce.
03:44Instead, we're seeing a reassessment of just how much of their work AI can do.
03:49These are also the folks who were on the chopping block.
03:52These are the folks who are subject to high-profile layoff announcements from some of the largest companies.
03:57Again, instead, in the April data, what we're seeing is some reassessment of just how much crowding out of that
04:04work can be done by AI.
04:05So I think that it's interesting to get this report.
04:08But to your point, this is about job vacancies.
04:10It's about the relationship between workers and the technology that's available to them.
04:16And it's the relationship between workers and the economy that they're interacting with.
04:20This is not specifically hires.
04:22We get hires for the month of May on Friday.
04:24And we're expecting to see about 95,000 jobs added during the month of May.
04:29Steady unemployment rate of 4.3%.
04:31But again, when all of the hiring, when all the vacancies are concentrated in just a few industries,
04:36it does not spark a ton of optimism about labor income growth and spending growth.
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