While too backward looking to be actionable (it reflects the labor situation with a 2 month delay) especially in a time when everyone is focused on the future of Trump’s fiscal policies (whose details remain secret), today’s JOLTs report showed few changes for “Janet Yellen’s favorite labor market indicator”: following a comprehensive data revision, the number of job openings rebounded to 5.626 million, beating expectations of a 5.45 million print, after missing estimates for two consecutive months, and higher from last month’s upward revised 5.539 million. The job openings rates as a % of total employment remained unchanged at 3.7%. As shown in the chart below, job opening have remained in a tight range around 5.6 million for the past year, peaking at 5.8 million last July.
What is more interesting perhaps is that one of our favorite charts, the cumulative 12 month addition in payrolls relative to hires shows that after 7 years, the implied gap appears to have been finally filled, as hires are finally at the level where they should have been based on payrolls.
Rising from 5.303 million to 5.440 million, the level of hiring in January was just shy of its all time highs. As a percentage basis, the rate of hiring rose from 3.6% to 3.7%.
But the most interesting data point in today’s JOLTS report was the the surge in quits, the so-called “take your job and shove it indiactor”, which in January soared by 135K people voluntarily leaving their jobs, the biggest monthly increase since December 2015, which in turn pushed the total number of Americans quitting their jobs in the month to 3.22 million, a level not seen since January 2001.
Finally looking at the Beveridge curve shows that despite the recent normalization in hiring, and the spike in quits, there is still a major disconnect between the pre and post-crisis labor market.