October JOLTS report: at least the jobs market isn’t getting any worse in disequilibrium

October JOLTS report: at least the jobs market isn’t getting any worse in disequilibrium

The JOLTS report for October was released this morning. While it did not indicate any significant progress towards a new labor equilibrium, at least the trends did not get any more destabilized.

Job openings (blue in the graph below) increased to 11.033 million, which remains below the July peak of 11.098 million. Voluntary quits (the “great resignation,” gold, right scale) decreased to 4.157 million, a decline of over 200,000 from last month’s peak. Actual hires (red) decreased slightly to 6.464 million, in line with the past few months, and better than the early part of this year:

Layoffs and discharges (violet, right scale in the graph below) decreased to 1.361 million, slightly above the May all-time low of 1.353 million. Total separations (blue) decreased to 5.892 million, a three-month low:

So, we have near-record (but not record) job openings, layoffs, and quits, with still-strong hiring and a normal level of total separations.

The situation is not getting any more out of sync, but on the other hand progress towards a new equilibrium has been very limited, to say the least.

So, what am I looking for going forward? The JOLTS data has only been around for 20 years, and neither jobs recovery after the two last recessions were very strong. In other words, we are in terra incognito for this series.

In order for the situation to resolve, the first thing I want or expect to see is a further increase in monthly hiring. At the same time, or shortly thereafter, I would expect to see a significant decline in voluntary quits. Only after these two things have occurred would I expect to see a substantial downturn in job openings, and I would not expect to see any significant increase in layoffs until all of those other trends are in place.