JOLTS (the Job Openings & Labor Turnover Survey) from the Bureau of Labor Statistics showed that April job openings hit a new all-time high, with 5,376,000 reported openings that employers have not been able to fill. Of course, the labor force has grown since the last time gross openings were this high, but the private and total openings rates are getting very close to all-time highs of their own. Today’s NFIB Small Business Optimism supports the JOLTS data as over 80% of small businesses looking to hire in May reported few or no qualified applicants.
Unfortunately, we didn’t see an uptick in the quits rate this month and, in fact, the private quit rate declined. It currently sits well below the past cycle’s highs let alone the 2000 peak. Both Total and Private Quit Rates declined 0.1 percentage points month-over-month. As a reminder, higher wages require both quits and openings to rise: openings are demand increasing, and quits are part of the supply response from providers of labor, workers. Total income (wages paid) can’t rise as fast if workers aren’t leaving lower paying jobs for higher paying ones that employers can’t fill.
Back to the good news, Private layoffs moved down month-over-month, suggesting that the recent increase will stay within the range that has been in place for several years. We note that after a huge spike in last month, the most recent Challenger Job Cuts report indicated a decline in layoffs; this would support the idea that the more lagged JOLTS survey will show a return to the middle of the range for the layoffs rate.
Finally, below we have updated a chart of selected industries that we ran following the March report, which shows that the Quit Rate at the industry level declined month-over-month reversing March’s big increases. Given the broad trend towards higher quits and less labor availability, we’d expect this trend to continue higher over the coming months, but it does show that the slowdown in quits was broad based for the month of April.