May JOLTS report continues to show a jobs market out of equilibrium

May JOLTS report continues to show a jobs market out of equilibrium

This morning’s JOLTS report for May continued all of the trends we saw in April – a huge amount of unfilled job openings, a comparatively weak level of actual hiring, an enhanced number of people quitting their jobs, and record low layoffs and discharges.

To begin with, on a month over month basis, all 4 of the metrics above, plus total separations, declined:

As noted above, headline job openings (blue) (which declined a slight -16,000) persisted at their record high levels over 20% above any prior reading, while hires (gold)  languished, relatively speaking, at normal levels:

Voluntary quits also declined from last month’s record high, but remained higher than any other prior month except for July 2019:

The record number of people voluntarily quitting their jobs (meaning they are not eligible for unemployment benefits) flouts the idea that job openings can’t be filled because of those benefits.

Finally, while total separations (green, right scale) are at normal levels, layoffs and discharges (red, left scale) declined to yet another all time low:

This is a market that is out of equilibrium. Almost nobody is getting laid off, but lots of people are quitting. There are record openings, but only a normal number of hires to fill those openings. The market will not get back into equilibrium until more people decide they want to fill those job openings. While undoubtedly for some of those people not entering the job market continued pandemic jobless benefits are an issue, for many more the lack of COVID safety in the locale where they live, the unavailability of reasonable-cost child care, or the general low pay for the labor required, are keeping them on the sidelines.