Job openings are back to the lowest level since April 2021. Quits are back to the pre-Covid trendline. 
Please consider the Job Openings and Labor Turnover Summary JOLTS report for July 2023.
Job Openings
On the last business day of July, the number of job openings edged down to 8.8 million (-338,000), while the rate changed little at 5.3 percent. Over the month, job openings decreased in professional and business services (-198,000); health care and social assistance (-130,000); state and local government, excluding education (-67,000); state and local government education (-62,000); and federal government (-27,000). By contrast, job openings increased in information (+101,000) and in transportation, warehousing, and utilities (+75,000).
Hires
In July, the number and rate of hires changed little at 5.8 million and 3.7 percent, respectively. The number of hires changed little in all industries.
Separations
Total separations include quits, layoffs and discharges, and other separations. Quits are generally voluntary separations initiated by the employee. Therefore, the quits rate can serve as a measure of workers’ willingness or ability to leave jobs. Layoffs and discharges are involuntary separations initiated by the employer. Other separations include separations due to retirement, death, disability, and transfers to other locations of the same firm.
The number and rate of total separations in July were little changed at 5.5 million and 3.5 percent, respectively. Over the month, the number of total separations decreased in accommodation and food services (-132,000).
In July, the number of quits decreased to 3.5 million (-253,000), while the rate changed little at 2.3 percent. The number of quits declined in accommodation and food services (-166,000); wholesale trade (-27,000); and arts, entertainment, and recreation (-17,000). The number of quits increased in state and local government education (+18,000).
Dramatic Decline in Openings Since April 2021
- April 2021: 11,755,000
- July 2023: 8,827,000
Pre-pandemic, the number of openings was 6,995,000. Openings are still elevated, assuming you believe the stats. I don’t.
With more and more online posting, companies fail to take down spots when they fill. Other companies are not really looking but they would hire the perfect person if that person applied. It’s difficult to estimate how many of the listings are real vs historic levels of openings.
Quits are another matter. Quits reflect actual decisions. And quits are back to the pre-pandemic trendline, 3,341,000 now vs 3,300,000 in February of 2020.
Job Quits by Sector in Thousands
Hires vs Nonfarm and Private Quits
Hires Drop Below Pre-Pandemic Level
Hires are now 5,773,000. That’s below the February 2020 pre-pandemic level of 5,998,000.
Nonfarm and private quits are just above pre-pandemic levels.
Real Wages are Rising
At the annual Jackson Hole summit this week, Fed Chair Jerome Powell commented “What matters for households is real wage growth. Even as nominal wage growth has slowed, real wage growth has been increasing as inflation has fallen.”
Although the Fed will be pleased with JOLTS data, real wage growth is a concern to the Fed.
Atlanta Fed and BLS Real Measures
Real means adjusted for inflation using the CPI as the measure of inflation.
Real wages are ticking up. To the extent real wages are rising more then productivity, the net impact is inflationary.
Ahead of the summit, I commented “Falling wages for new hires only won’t appease the Fed.” My comment was on target given Powell’s subsequent statements.
For more on real wages, please see Wages for New Hires are Falling, But the Impact is Negligible
UAW Gearing Up for a Strike, It Could be Long and Nasty
The United Auto Workers are gearing up for a strike, Biden is behind them 100%.
Bloomberg estimates the UAW demands would add $80 billion to costs.
UAW Demands
- 32-hour workweek
- 46 percent pay raise over 4 years
- Right to strike over plant closures
- Increased retiree benefits
- Defined pension plan for all workers
- Cost of living adjustments
For discussion, please see UAW Gearing Up for a Strike, It Could be Long and Nasty
Also see Yet Another Biden Regulation Will Increase Costs and Promote More Inflation
Everything Biden does and supports is inflationary, at least until he manages to crash the economy.
Sorry, that 2nd para should also be in quotes.
Powell July 26
“While the jobs to workers gap has narrowed, labor demand still substantially exceeds the supply of available workers.”
So, what are we going to be looking at? Really it will be the broader, the whole broader picture, and starting with, we’re looking for moderate growth, right? We’re looking for supply and demand through the economy come into better balance, including, in particular, the labor market.
Who chooses the most lagging indicator of all indicators as his crystal ball to the future?
Powell Aug 26
“For example, job openings have declined substantially without increasing unemployment—a highly welcome but historically unusual result that appears to reflect large excess demand for labor.”
Because the BLS hasn’t revised the down yet. Job openings even revised have been misleading since the mid-teens, and the huge departure from hires is even worse this time around. But that one-of-a-kind unique historical anomaly is the number Powell is betting the house, ie our house, on. The Fed is always prejudiced to look for inflation over deflation. They’ve never seen a recession till we’re in it in their entire history.
The hires number is the lowest since Jan 21, same as 2019, the last time we were talking about a recession and The Fed was *cutting* interest rates. Quits are also at 2021 numbers. The market looks like it has come full cycle.
The bond markets just sit there and laugh at the amount of idiocy it has to put up with from the idiot with his hand on the dial.
Now we have a quickening pace to the downside. What if we get a poor Payrolls on Friday? Will Powell care?
San Fran FRB Aug 16
“.. This implies that there is than $190B remaining in excess savings in the agregate economy. Should the recent pace of drawdowns persist… …aggregate excess savings would like be depleted in the third quarter of 2023.”
Add that to student loan cliff and things only get worse from here.
If I’m negotiating with the Auto Workers, I’m slow playing my hand.
“UAW Gearing Up for a Strike, It Could be Long and Nasty”
I sure as hell hope so. I hope the UAW gets everything they want, then Ford & GM go bankrupt because they’ve over estimated demand for BEVs. Would love to see the whole industry move to Asian imports including cars from China.
The whole lot of them need to be punished for their greed. F’ing rolling out a Blazer RS BEV that’s going to start out at $62K. Just absolute idiots. Someone finally got to Barra told her to get her head out her ass and not kill of the Volt.
GM killed the Bolt. Absolutely worst decision EVER!
UAW don’t support Biden. He might let them rot.
1) Job Openings minus private Quits in a race to the bottom. Job Openings
is losing its hump.
2) Hires vs private Quits are parallel to each other. The spread between them is constant.
3) Atlanta might cross BLS 3M production, before crossing BLS private 3M.
Atlanta Fed covers : GA, FL, AL…
4) Job Quits : construction, new immigrants no bs. They don’t quit, nor flip. Mfg second place. The obese Leisure and hospitality : no fun.
Not mentioned – separations due to “irreconcilable differences.”
UAW strike is a no-lose situation. They have already successfully bilked the taxpayer thru Obama … and they will do it again through Biden. Unions have it well when their puppets are in power because they can charge unsustainable rates, make unsustainable demands, and anything that goes south will be buttressed by the taxpayer. It’s a great gig.
Tesla is non-union shop. Stock doing well last few days. Cost under control and tax credit.
If the response to the survey is so low then does that negate the usefulness of the indicator? What about the Job Openings number to number of unemployed ratio? Does the low response to JOLTS also negate the usefulness of the ratio?
I think the usefulness is largely negated, but I also note that federal government surveys of their own employees routinely have an even lower participation rate in the Biden regime era!
I don’t believe inflation is declining in any meaningful way. The gas station & grocery store are where we feel it most.
In my area food prices are ‘up’ easily 17%.
Agreed. The people telling us inflation is declining do not live in the real world. They have net worths, (largely tied up in the real estate and stonks bubbles they deliberately crafted), that are difficult for regular people to even comprehend.
Lumber has come WAY down but all that’s doing is padding builders’ profits.
Gas is down from a year ago, but outside of that, I agree. Butkus.
Housing, rent, food & utilities are all up. That’s like 90% of the bottom 50%’s budget.
But we sure as hell needed that June pause in FFR increases. That’s turning out gangbusters for JPowell. Hell, the Fed GDPNow tracker just hit freaking 5.9% for Q3 with 13 data points released through 2/3 of the quarter.
My gawd is it time for the return of the 75-basis point bazookas?
Going to be ROTFLMAO if Bullard’s 7% terminal rate prediction from last December is within 25-50 basis points. Could you imagine the market’s reaction if JPowell came out and said he say 100-150 basis points upside?
And, I’m thrilled to see 10Y+ treasury yields rising. It’s about damn time.
Bonds liked the #s.
Those job opening numbers are inflated by all the quadruple posted jobs.
Hiring line is the only one that matters.
Have a hard time believing wage growth is hirer than inflation. My household expenses have jumped so much (20-100%) for the same items.
I suspect JOLTS is overstated by about 50%. They only have a 30% response rate and companies that have openings (and still exist) are far more likely to respond.
Unless the methodology changed from pre-covid times, that ought not matter. Still far more job openings than before.
Quit rates also still high than post 08/pre pandemic level, we are back to housing bubble era levels.
Hires did slow down, but still above the recessionary levels of 2008 – 2012.
Things still looking fine for the economy. Bond bros likely jumped the gun again, as they have been doing since Covid hit. They say Covid can cause lasting brain damage, I wonder if this is what happened to bond bulls as they keep ignoring economic reality. First when they deluded themselves into thinking inflation was transitory, despite all the evidence to the contrary, and now by throwing cash at a super inverted curve even when the evidence suggests there is no recession in sight.
Ironically, it might be when bond bulls throw the towel and allow the curve to actually steepen that a recession actually hits. But, so long as they subsidize long term borrowing costs for the economy, especially for a government that is intent to deficit spend as much as it can to prevent a recession, then it is unlikely to happen.
The difference is a lot of companies went out of business because of covid and the BLS is making up job openings for them.
Then there is the other side of what Biden is doing, just as a judicial balance scale reckons with right and wrong, allow me to add this from Kiplinger, which is about as non-biased as one can find. Here is there 1 year ago article on Winners and Losers of the Biden Inflation Reduction Act which, by the way passed both houses of Congress: https://www.kiplinger.com/investing/stocks/605045/bidens-inflation-reduction-act-investing-winners-and-losers