- 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. In August, all of the important components showed further deceleration.
While job openings (blue in the graph below), a soft statistic that is polluted by imaginary, permanent, and trolling listings, rose 329,000 to 8.040 million, actual hires (red) declined -99,000 to 5.317 million (vs. a pre-pandemic peak of 6.0 million), and voluntary quits (gold) declined -159,000 to 3.084 million. In the below graph, they are all normed to a level of 100 as of just before the pandemic:
Both hires and quits continued further below their immediate pre-pandemic readings.
In a wider historical context, the picture remains decent. 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 about 3/4’s of those two expansions. So the real, “hard data” jobs market is not “weak” by historical standards, just not as strong as the past several years.
Meanwhile, layoffs and discharges (blue in the graph below) declined -105,000 to 1.608 million, a level just above average for the last several years:
Compared with the monthly average of initial jobless claims (red), It appears that both may be declining after the post-pandemic summer seasonal increase during May through July.
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 three months, to its lowest point since April 2020, and only average for the two previous expansions:
As you can see, this forecasts continued deceleration in nominal wage gains, down to a range of about 3.3%-3.5% YoY in the coming months. So long as consumer inflation remains moderate, this will nevertheless continue to be a positive.
