JOLTS report for September shows continued decleration in almost all metrics, now close to a cause for concern

 

 - by New Deal democrat

The JOLTS survey parses the jobs market on a monthly basis more thoroughly than the headline employment numbers in the jobs report. For several years, my mantra for a lot of statistics has been “decleration.” Well, in the case of the employment market, we have passed the point where decleration is a good, or at least unconcerning thing.

Of all of the monthly statistics, only hires (red in the graph below) increased, by 123,000 to 5.558 million, a four month high (vs. a pre-pandemic peak of 6.0 million). Job openings (blue), a soft statistic that is polluted by imaginary, permanent, and trolling listings, declined another -418,000 to 7.443 million, the lowest since the pandemic. Voluntary quits (gold) declined -107,000 to 3.071 million, the lowest since August 2020. In the below graph, they are all normed to a level of 100 as of just before the pandemic:

Hires and quits both remain below their immediate pre-pandemic readings, and job openings are now only about 400,000 above their pre-pandemic level.

In a wider historical context, the picture remains decent, but mediocre. The below graph shows all three series from their inception in 2001. But because the US population has grown almost 20% since then, I divide by the prime age population over the same time. I have also normed the current values to the zero line to better show the historical comparison:

So normed, hires remain at levels conquerable to the second half of each of the last two expansions, and quits better than almost the entire 2000s expansion as well. The real, “hard data” jobs market is not “weak” by historical standards, but it would be wrong to still call it “strong.” 

Meanwhile, layoffs and discharges (blue in the graph below) rose sharply, by 165,000 (the biggest increase since March 2023) to 1.833 million, the highest level since 2020 except for January and March 2023:

This is of a piece with the big jump in initial jobless claims (red) in several recent weeks, and may reflect both the Boeing strike and the impacts of Hurricane Helene, so take it with an extra grain of salt. Still, it suggests that the unemployment rate might increase another 0.1% or even 0.2% when we get the October report this Friday.

Finally, the quits rate (blue in the graph below) has a record of being a leading indicator for YoY wage gains (red). After stabilizing earlier this year, the quits rate resumed declining in the past four months, to its lowest point since 2015 except for March through May 2020:

This forecasts continued deceleration in nominal wage gains below 3.5% YoY in the coming months. The silver lining is that so long as consumer inflation remains moderate, this will nevertheless continue to be a positive