Job openings listed by US private sector firms and government employers (JOLTs) hit a new all-time high in the month of July, painting an extremely rosy picture of the July labor market despite the relatively weak August payrolls report last week. As shown in the left-hand chart below, total separations have cooled off. Therefore while labor demand appears by any measure to be quite high, businesses aren’t having a very hard time holding on to their existing work force.
The openings rate and private openings rate are both at all-time highs, tied with two prior periods in the current expansion when they reached their current levels. These both signal strong labor demand from employers.
While still trending slowly higher, the quits rate remains quite low relative to the number of job openings reported in the JOLTS survey. The labor market is still not raising pay enough to incentivize employees to either jump ship or stay at their current firm; we think a persistent pessimism and lack of recognition by employees at how tight labor markets are is another factor keeping these rates low.
Another strong indication of a healthy labor demand was the second straight month of layoffs sitting at 1.1% of the labor force, the smallest level ever. Private layoffs are down to 1.2% this month, another tied low on an all-time basis.
Finally, looking at industry and geographic trends, it was a bit of a mixed month. Quit rates for most “low pre-requisite” industries are still trending up but not showing any acceleration. On a geographic basis, firings were the lowest on record for the West Census Region.