While last month’s June JOLTS (Job Openings and Labor Turnover) survey wasn’t very strong, July made up for it.  Bureau of Labor Statistics data showed an explosion higher in job openings to new all-time highs, well in excess of private estimates of 5.3 million openings for the month.  Separations declined as a percentage of the labor force, driven by a collapse in firings from employers.

On a rate basis, showing openings as a percentage of all employment plus openings hit new all-time highs, for both the total labor market and the private labor market only.  There are more openings (a measure of demand for labor) now than at any point in the last economic expansion, both in number and versus the size of the labor force.

There was less good news in the quit rate.  Despite lots of available alternatives, workers are hesitant to leave existing jobs, and the quit rate remains low.  In our view, accelerating quits will result in accelerating wage growth; that said, either workers are not matched (in skills) to available openings or are too risk averse to quit.

While workers aren’t leaving their jobs voluntarily, they also aren’t leaving due to firings.  The layoff and discharge rates for both the total labor force and the private labor force dropped month-over-month, with government layoff declines leading to a crash to all-time lows in the total rate.

Looking at some more detailed data, below we show the quit rates for some marginal labor markets; these are the sorts of low-prerequisite job functions that should be most sensitive to tightening labor markets.  As shown, quits have made little progress for any of these industries, basically moving sideways over the past few quarters with the exception of a stronger trend in Food Services.  Regionally, layoffs in July were extremely low; the Northeast was the standout, with firings hitting all-time lows at less than 1% of the labor force in the region for the month.


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