November JOLTS report adds to the data showing continued labor market deterioration

 

 - by New Deal democrat

The second of this morning’s reports was the JOLTS survey for November. 

Like many other statistics concerning jobs, the JOLTS series have been deceleration for several years. The question now is whether they level off or continue to decelerate towards outright declines in net job creation. Additionally, it is a slight leading indicator for both initial jobless claims and unemployment; and for wage growth as well.

In contrast to the economically weighted ISM reports I discussed earlier this morning, in November as has so often been the case in 2024, the JOLTS data was mixed, with a downward bias. The soft statistic of job openings rose to a five month high, but the hard data of hires, quits, and also layoffs and discharges declined. The below graph norms the series above (expect for quits) to 100 as of just before the pandemic:

Both actual hires, as well as quits, turned weaker than their pre-pandemic levels a little about one year ago, while openings remain higher. The trend in openings has been lower, and I suspect that the improvement in the past two months is likely to prove to be just noise.

Showing the same data as YoY% changes tells us that there has been no significant change in the decelerating trend; in other words, there remains no evidence that there has been any leveling off:

The news on layoffs and discharges was also not so good. That’s because, in addition to rising in November, October’s very good number was revised significantly higher. This suggests that the YoY increases in initial jobless claims that we have seen during December have not been a fluke, and are more likely than not to continue:

Finally, although I’ll spare you the graph this month, 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, and in November it tied September for its post-pandemic low:

This suggests that on a YoY basis wage gains will continue to decelerate as well. If inflation stabilizes or picks up again, this could create a problem later this year - and if the overall trend of the JOLTS data continues, so will it.

Economically weighted ISM indexes for December forecast continued expansion

 

 - by New Deal democrat

We got two significant economic releases this morning. First, let’s take a look at the ISM services index. I’ll examine the November JOLTS report separately.

Recall that services are about 75% of the economy. Thus, even if goods production is contracting, their share of the economy has declined to the point where that does not necessarily mean a recession is in the offing. So I average both ISM indexes by their economic weights.

And the ISM services report for December came in strong once again. The total index was at 54.1, well into expansion territory, similarly the more leading new orders component (not shown) was at 54.2:

The three month average of each is 54.1 and 55.1 respectively.

Since the ISM manufacturing index improved last week to 49.3 for the total index and 52.5 for the new orders component, and their respective three month averages are 48.1 and 50.0, the economically weighted average of the two for December is 52.9, and the new orders component is 53.8. Their respective three month averages are 52.6 and 53.8.

In short, the economically weighted average of the ISM indexes forecasts continued economic expansion in the months ahead.

2024 year end Coronavirus dashboard: the year COVID-19 turned into the flu

 

 - by New Deal democrat

A year ago I said that I would only update information about the state of COVID-19 if there was something significant to report. And as of the end of the year 2024 there is: deaths from COVID in 2024 have fallen to the point where they are equivalent to the upper end of a “normal” flu year. Because for the entire year they are likely to have been under 50,000.

This is an absolutely huge improvement over the first several years of COVID, and even much better than 2023. Let me review, first graphically, then with a few numbers.

Here is what the entirety of weekly deaths from COVID look like all the way back to the start of the pandemic:

You can see that deaths during 2020 and 2021 were much higher than in any of the three years since. But that’s not all.

Because when we take out the first two years, and only look at the last three, we can see that the substantial decline in deaths has continued in each year:

To quickly review, here are the deaths for each calendar year (keeping in mind that the numbers only begin at the end of March 2020):

2020: 393.0 thousand (9.2 months; 512.6 thousand annualized)

2021:  455.9 thousand

2022:  243.9 thousand

2023:  75.6 thousand

2024:  46.1 thousand

Since the data for the last three weeks of 2024 is only preliminary so far, it is likely that another 1,000 to 1,500 deaths will be added to that total, making it 47.1-47.6 thousand when final.

According to the CDC, deaths from the flu typically average between 12,000 and 51,000 annually. So this year’s total for COVID will be within that range. In fact, for the last 52 weeks of final data through December 7, there were 51,200 deaths - only 200 above the CDC’s average range - and the 52 week total has been declining by close to 1,000 since the beginning of October.

The pattern is similar when we look at infections as measured in wastewater. The original Omicron variant peaked at 23.6 particles per mL. One year later the Holiday peak was 10.99 particles. Last year at this time the peak was 13.23 particles:

Now let’s zoom in on the last 12 months. With one week left to go in 2024, there are only 4.75 particles per mL:

Although a number of States did not report through the Holiday period, meaning the estimates in the gray shaded area to the far fright are likely to be revised higher, It’s likely that the Holiday peak which should occur this week will see something like only about 6.0 particles per mL - not just only 1/2 of last winter’s peak, but under this past summer’s peak as well.

It looks like the decline in COVID can be attributed to three factors: (1) the % of people who have had one or usually multiple vaccinations; (2) the % of people who have developed some resistance by having been infected one or more times; and (3) the virus, as one expert put it, having “evolved itself into a corner.”

What does the last factor mean? For that, let me show you the following graphic from the CDC’s variant frequency site:

Every single variant currently in circulation evolved from the original Omicron variant, via BA.2, then BA.2.86, then JN.1, and finally JN.1.11.1. All the other lineages have been out-evolved and have died out.

A similar thing happened with the flu. Every single flu variant in the past 100 years has been a descendant of the original “Spanish flu” which was so deadly during and after World War 1. The original death toll declined over time to the “normal” range I cited above. That, by the way, is why scientists are so concerned about the new bird flu. If it makes the full jump to human to human transmission, it will be the first entirely new flu strain separate from that of the past 100 years.

In the meantime, we can breathe something of a sigh of relief, and hope that COVID-19 continues to wane over time.