Friday, March 18, 2016

JOLTS adds to accumulating evidence of late cycle weakness

 - by New Deal demorat

Yesterday's JOLTs report (note: for January) has given us a more detailed look at the jobs market.  Last month was a particularly good report, but for most of the last 12 months I have been underwhelmed, noting that the pattern was similar to that in late in the last expansion.

First, here is a comparison of job openings (blue) and hires (red).  We only have one compete past business cycle to compare this with, so lots of caution is required, but in that cycle, hires peaked first and then openings continued to rise before turning down in the months just prior to the onset of the Great Recession:

That late 2005-06 pattern is what we hae been seeing for nearly a year now, as shown in this close-up of the last 2 years:

The same thing shows up in the YoY comparisons:

Early 2016 looks very much like early 2006.

After making a new post-reession record last month (very good), quits fell back at their late 2015 level:

Still, overall trend in quits appears to be positive, most like late 2005.

The good news is, this still looks like a late cycle slowdown, but not an actual contraction.  The bad news is, last month's good report was probably something of an outlier, and the evidence keeps accumulating that we are getting late in the expansion.