- by New Deal democrat
To review briefly, the monthly JOLTS reports give us a more granular look at the employment sector, but are delayed by one month vs. the jobs report. Like the jobs reports, most JOLTS series have shown deceleration for several years. The question over the last year has been whether they level off or continue to decelerate towards outright declines in net job creation, or stabilize in a “soft landing.”
Additionally, I look at this data because it is a slight leading indicator for both initial jobless claims and unemployment; and for wage growth as well.
For January, the JOLTS data released this morning with one exception was positive on a month over month basis. Unfortunately, this was counterbalanced by substantial downward revisions to all of the 2024 data on openings, hires, and quits. Layoffs and discharges were not materially affected.
For the month, the “soft” statistic of job openings rose 232,000 from near its post-pandemic low, while the hard data of hires only rose slightly, by 19,000. Quits rose by 171,000. The downside was that layoffs and discharges also rose, by 119,000. The below graph norms the series above (expect for quits) to 100 as of just before the pandemic:
In general, the good news is that there has been stabilization in the “hard” data since the middle of last year. But the bad news is that, on average, last year openings were revised lower by about -300,000 per month, hires by -100,000, and quits by -60,000. (NOTE: I will update this later).
When we look at hires and quits on a YoY% basis, there has been modest improvement in the decelerating trend; in other words, neither openings, hires, nor quits have leveled off at this point, but the trend is gradually getting “less bad”:
As noted above, the news on layoffs and discharges was negative on a monthly basis, but at least the data was not revised for the worse for 2024. Below I plot this data YoY compared with th e monthly average of initial claims, which has had some residual seasonality issues. And it accords with the weakness we have seen in the YoY increases in initial jobless claims since late last summer :
Finally, the quits rate (blue in the graph below) has a record of being a leading indicator for YoY wage gains (red). In the post-pandemic view, the quits rate stabilized earlier in 2024 before resuming its decline, but has stabilized at 2.0% +/-0.1% since June. In January it rose 0.2% from 1.9% to 2.1%, continuing that trend:
This continues to suggest that on a YoY basis wage gains may also remain stable in the months ahead as well, which is good news - as long as inflation does not pick up.
