- by New Deal democrat
This morning’s other economic report was the JOLTS labor market report for August. This parses turnover in the market by hires, layoffs, and quits, among other things. It is a minor indicator, but let’s take a look.
The first graph below shows the “soft statistic” of job openings (blue), actual hires (red), and quits (gold), all normed to 100 as of just before the pandemic:
What is most noteworthy about this is that both hires and quits have had a sideways trend for the past two years - and that trend continued in August, as both numbers were basically right in the middle of that trend. Only the “soft” metric of openings has had a slightly increasing trend this year (although I didn’t run the historical graph, the fact is that outside of recessions, openings have had an upward trend for the past 25 years). Additionally, note both hires and quits have been running below their level of 2019.
Here is the same graph for layoffs:
Layoffs have been running at close to their lowest post-pandemic levels over the past nine months, and their declining trend since late last year is of a piece with what we have been seeing in the very low level of initial and continuing jobless claims each week.
Also, let’s update the comparison of the quits rate (blue, right scale), which has been suggested to lead YoY average hourly wages (red, left scale):
Like the number of hires and quits, for the past year the quits rate has been close to completely flat. That argues that *nominally* average hourly wages YoY should be stabilizing at a 3.4%-3.5% rate. In fact, if YoY average hourly earnings continue to decelerate in this Friday’s jobs report, that would call into question the above relationship.
But the general takeaway from this report is a jobs sector that has normalized in a low hire, low fire trend.
