Tuesday, December 5, 2023

October JOLTS report: yet one more month in the ongoing decelerating trend

 - by New Deal democrat 

All of the major metrics in this month’s JOLTS report for October continued to show deceleration. Here are openings (blue), hires (red), and quits (gold), all normed to 100 just before the pandemic:

As you can see, at 98.1 and 103.9 respectively, both hires and quits are virtually identical to where they were before the pandemic. Meanwhile job openings declined to their lowest level since early 2021, and are down 2/3’s from their post-pandemic peak towards their prior levels. The one positive is that neither quits nor hires have deteriorated signifiantly in the past three months.

Meanwhile the number of layoffs and discharges increased, although not to a new high, and the trend this year can be read as either flat or increasing:

Finally, three months ago I premiered a comparison of the quits rate (blue in the graph below) and average hourly earnings (red). This is because the former has a 20+ year history of leading the latter, which I have in the past described as a “long lagging” indicator that turns well after most other metrics. Here’s the update on that comparison for this month:

The good news is that the quits rate has held steady since July. But because wages lag, they are more likely than not going to decline YoY from last month’s 4.4% YoY growth, although holding steady or a slight increase to 4.5% can hardly be ruled out.

In conclusion, we have yet another month confirming the ongoing deceleration in the jobs market.