Last month I wrote that the January JOLTS report reflected very positive trends. Today they got revised away.
As a refresher, unlike the jobs report, which tabulates the net gain or loss of hiring over firing, the JOLTS report breaks the labor market down into openings, hirings, firings, quits, and total separations.
I pay little attention to “job openings,” which can simply reflect that companies trolling for resumes, or looking for the perfect, cheap candidate, and concentrate on the hard data of hiring, firing, quits and layoffs.
The first important relationship in the data is that historically, hiring leads firing. While the one big shortcoming of this report is that it has only covered one full business cycle, during that time hires have peaked and troughed before separations.
And here, there has been an important revision. Here is the historical relationship on a quarterly basis between hiring (red) and total separations (blue) as it existed through the end of the third quarter of 2017: