In a nice reversal from yesterday’s activity, the major equity indices are showing strength and all trading in the green. The Dow Jones Industrial Average is getting a particularly nice lift thanks to better-than-expected earnings at Coca-Cola (KO). Greece continues to be non-compliant with the monetary policies of the European Central Bank (ECB), but it doesn’t appear that developments are leading to market volatility today. Oil stocks continue to be under pressure today as futures dropped 4.0% to just under $51 per barrel. Demand for oil from the Organization of the Petroleum Exporting Countries (OPEC) is expected to rise this year, while growth in US oil production will slow as American energy firms cut back on drilling. In its recent report, OPEC noted that it has slightly increased its 2015 forecast for oil demand, noting that cheap oil will increase consumption in the US, although many industry experts continue to believe the industry is oversupplied. There were two noteworthy economic releases during today’s session that separately indicated improvement in labor and some potential difficulties with consumption.

Firstly, the Labor Department's Job Openings and Labor Turnover Survey (JOLTS) noted that as of the last business day in December, there were 5.028 million job openings in the labor market, which is slightly higher than the 4.847 million in November. However, the number of hires (5.148 million) and total separations (4.886 million) were little changed from the previous month. Within the separations category, the all-important quits rate was little changed at 1.9% and the layoffs and discharges were unchanged from the prior month at 1.2%. The number of hires was the highest level of hires since November 2007 at a rate of 3.7%. Hires increased over the month in the construction sector, but were little changed for total private and government payrolls. Total separations, both voluntary and involuntary, were little changed from November at 4.9 million. However, we note that this was the highest level of separations since October 2008 with a separations rate of 3.5%. Quits represent those workers who feel comfortable enough to quit their job before locking up new employment. There was a total of 2.717 million quits in December, which didn’t change much for the month in both the total private and government sectors. In particular though, quits increased in construction and durable goods manufacturing at about the same rate in all regions of the US. Ultimately, JOLTS demonstrates that there is a slow, but steady improvement in the US jobs market with the number of new hires and a slight increase in the number of workers quitting their jobs.

While the economy may appear to be getting back to solid footing, inventories at the wholesale level look quite heavy. In December, wholesale inventories increased by 0.1% relative to a notable 0.4% decline in sales at the wholesale level. This mismatch ended up driving the stock-to-sales ratio up to 1.22 (from 1.21 in November) which is the highest reading for this ratio since the recession days of late 2009. The ratio was at 1.17 for most of last year, but has since been on a climb. The unwanted build in wholesale inventories is centered on the non-durable component where sales fell by 1.7% in the month. The culprit here is in petroleum products where sales, reflecting both price effects and lower demand, declined by 13.7% in December. Based on weekly petroleum inventory data, supply overhang has continued to build into 2015, so far. Lumber and electrical goods showed big draws this month, both of which may be signaling rising demand in the construction sector. On a national level, inventories have been moving higher relative to sales, but the imbalance can be pinpointed in the wholesale sector. However, we note that inventories at the factory level are also experiencing some pressure. The business inventories report will be released on Thursday and should round out December's inventory picture with more detailed data on the retail sector.