January’s Employment Situation Report missed expectations, and it’s fair to say that the corresponding Job Openings and Labor Turnover Survey (JOLTS) released this morning did as well.  While the number of job openings beat expectations handily and rose notably MoM, there were major downward revisions to numerous series. Job openings for December were revised down from 5,607,000 to 5,281,000. Our prior post on December’s JOLTS is here, for comparison purposes.

With total openings being revised down the total opening rate was also revised lower and remains well below recent highs after December’s rate was revised down 0.2 ppt.

Even more disappointing than the big downward revisions to December data was the quit rate. While the Total quit rate for December was actually revised up to 2.2% from 2.1%, January’s unwound the entire jump in December, coming in at 2.0%.

Extremely low December Layoff & Discharges were also revised back to more normal readings.  While the current discharge rate is extremely low and can’t possibly be construed as accelerating or concerning, it was disappointing to see that more Americans got fired in December than had previously been estimated.

By far the most disappointing revelation in the report was the sharp downtick in Construction industry quits.  While other low pre-requisite industries (Food Services and Retail, notably) have ticked lower, Construction quits are signalling that the construction labor market is less tight than we had previously thought.  Overall, this JOLTS report suggests more slack than had been estimated as of December, although the good news is that labor demand is still very apparent.  Ultimately, we’d like to see a bigger gap between supply and demand that would foster wage growth and higher turnover, but the bad news on that front is only limited when openings are still high and layoffs are still very low.

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