- by Neew Deal democrat
Yesterday’s JOLTS survey for June continued to be consistent with a “soft landing” scenario. This is good news, particularly on a relative basis, since the actions of the new Administration, especially on trade, have exacerbated the fear that this might transform into a “hard” landing, a/k/a a recession.
As a quick refresher, this survey decomposes the employment market into openings, hires, quits, and layoffs. And here are job openings, hires, and quits all normed to 100 as of just before the pandemic:
All of these declined on a monthly basis, but except for quits, were not much changed from one year ago. Openings are “soft” data and have generally trended higher going all the way back to the turn of the Millennium. They have remained above their pre-pandemic levels, and this month declined -275,000 to 7.437 million, vs. XXX million one year ago. HIres declined -261,000 to 5.204 million, vs. XXX million one year ago. Finally, voluntary quits declined -128,000 to 3.142 million, vs. XXX million one year ago. As indicated above, this is the only series significantly lower, by -4.3%, than one year ago.
Now let’s look at several components are slight leading indicators for jobless claims, unemployment and wage growth.
Recently one item of concern has been layoffs and discharges, which generally have averaged higher since last July. In June, they declined by -7,000 to 1.604 million, towards the lower range of readings in the past 2+ years:
This generally according with both the increase in the unemployment rate in 2023-24, as well as its plateauing this year (red, right scale), as well as the recent trends in new and continuing jobless claims (not shown), which after a YoY increase earlier this year, improved in the last month.
Finally, the quits rate (left scale) typically leads the YoY% change in average hourly wages for nonsupervisory workers (red, right scale):
In June the quits rate remained steady at 2.0%, about average for the past 12 months. The downshift that occurred late last year has finally been reflected in average hourly wages in the past several months. But the latest data suggests that nominal wage growth will not decelerate much further.
As I noted at the outset, the JOLTS reports have been consistent with the “soft landing” scenario remaining intact through June. But as I indicated on Monday, if there is “payback” for the anomalous seasonally adjusted big increase in education hiring in June, on Friday we will find out if that trend holds.
