- by New Deal democrat
This morning’s JOLTS report for October is now the most current official monthly indicator for the jobs sector.
And it was emphatically not good. In fact, it was red flag recessionary.
In the past year, in contrast to much other data in the jobs sector, the JOLTS reports had been very much consistent with a “soft landing” jobs scenario. Not so this month.
The survey decomposes the employment market into openings, hires, quits, and layoffs. The first of those, openings, is soft data that can be influenced by stale or false postings, and trolling for new resumes. It has been on a general uptrend ever since the inception of the series 25 years ago. In contrast, the other series are hard data representing actual actions - and all of those were bad.
Let’s begin with job openings (blue), hires (red), and quits (gold) all normed to 100 as of just before the pandemic:
The “soft” data of openings has been rangebound between 7.103 million and 8.031 million for the past 18 months, and this month came right down the middle at 7.670 million. But actual hires declined a sharp -218,000 to 5.149 million, the lowest reading since the pandemic except for June of last year and August of this year. But quits were at their worst level of all since the pandemic, down -187,000 to 2.941 million.
And the bad news doesn’t end there. Layoffs and discharges, which while noisy lead both continued jobless claims (gold) and the unemployment rate (red) rose 73,000 to 1.854 million, except for one month a four year high:
Finally, the quits rate (left scale), which typically leads the YoY% change in average hourly wages for nonsupervisory workers (red, right scale), also declined -0.2% to a post-pandemic low of 1.8%:
This suggests that nominal wage growth, which has already been trending slightly downward, is likely to decelerate further in the next several months. Since inflation has been rising, it will put a further squeeze on ordinary working Americans, and may cause real aggregate payrolls to turn negative.
This was a bad, even recessionary, report consistent with actual job losses in October, which every other non-governmental survey has suggested as well. Unfortunately, since most other new releases are stale data from September, we will have to await better data for October and November to be more confident that we have arrived at a turning point.
