- by New Deal democrat
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 last year and this year is whether they level off or continue to decelerate towards outright declines in net job creation, or stabilize in a “soft landing.”
I additionally look at this data because it is a slight leading indicator for both initial jobless claims and unemployment; and for wage growth as well.
The JOLTS report for December released this morning was generally mildly positive. The “soft” statistic of job openings fell sharply close to its post-pandemic low, but the hard data of hires and quits rose, while layoffs and discharges declined, all good things. The below graph norms the series above (expect for quits) to 100 as of just before the pandemic:
As I suspected, and wrote last month, he trend in openings has been lower, the improvement in openings during October and November was probably just noise. Meanwhile hires and quits appear to have stabilized during the second half of 2024.
On the other hand, when we look at hires and quits on a YoY% basis, there has been only modest improvement in the decelerating trend; in other words, there remains little solid evidence that there has been any leveling off:
The news on layoffs and discharges was also modestly positive, as the higher level of the last few months was maintained. Below I plot this data YoY compared with th e monthly average of initial claims, which has had some residual seasonality issues. And it suggests that the YoY increases in initial jobless claims that we saw during December have not been a fluke, and are more likely than not to continue:
They also look similar to the absolute trend in continuing claims:
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, and continued at that rate in December:
This suggests that on a YoY basis wage gains may stabilize in the months ahead as well, which is good news as long as inflation does not pick up.
