September data released in the Bureau of Labor Statistics’ Job Opening and Labor Turnover survey (JOLTS) showed a small improvement over last month’s openings level but continued the recent trend of stagnating separations. While the rate hasn’t materially deteriorated, it remains in a much lower, sideways trend than it had held through the beginning of this year despite improved numbers of openings for workers in the meantime.
On a rate basis, job openings edged back up towards highs after falling sharply in the month of August. For private industries only, the openings rate once again sits just below all-time highs.
While openings continue to exhibit improvement, the quit rate does not. It’s basically done nothing for the last two years, and without a material acceleration it will be impossible for labor markets to pass along higher wages to labor suppliers (workers) following price signals. The flip side of this coin may be that workers need more monetary incentive to quit, and that if the recent strength in Average Hourly Earnings continues we may see workers enticed to quit their jobs. Thus far, however, that enticement hasn’t led to quits.
Despite cries that Challenger Job Cuts (announced global layoffs by large US companies; covered previously in The Closer) are rising sharply, the statistically sampled, representative data from the BLS does not show a material move higher in layoffs for the broad economy. While Private Layoffs rose MoM, they remain right in the middle of their narrow band since 2012.
Below we chart quit rates in low pre-requisite industries that represent the lower end of the labor market, which we view as a leading indicator for overall tightness. As shown, while recent trends have moderated, most quit rates continue to trend gradually higher despite a recent pause. As for layoffs, all regional series remain in normal, low ranges and are showing no sign of broad acceleration due to falling demand for labor.