The BLS Job Openings and Labor Turnover (JOLTS) shows openings reached a series high of 7.1 million.
Job Openings
On the last business day of August, the job openings level reached a series high of 7.1 million. The job openings rate was 4.6 percent. The number of job openings was little changed for total nonfarm, total private, and government. Job openings increased in federal government (+15,000). The number of job openings was little changed in all four regions.
Hires
The number of hires in August reached a series high of 5.8 million. The hires rate was 3.9 percent. The number of hires was little changed for total nonfarm, total private, and government. Hires were little changed in all industries and in all four regions.
Separations
Total separations includes quits, layoffs and discharges, and other separations. Total separations is referred to as turnover. 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 includes separations due to retirement, death, disability, and transfers to other locations of the same firm.
The number of total separations was little changed at 5.7 million in August. The total separations rate was 3.8 percent. The number of total separations was little changed for total private and for government. Total separations increased in state and local government education (+20,000). Total separations was little changed in all four regions.
Quits
The number of quits was little changed in August at 3.6 million. The quits rate was 2.4 percent. The number of quits was little changed for total private and for government. Quits increased in wholesale trade (+24,000) but decreased in professional and business services (-82,000). The number of quits was little changed in all four regions.
Layoffs
The number of layoffs and discharges edged up to 1.8 million in August (+176,000). The layoffs and discharges rate was 1.2 percent. The number of layoffs and discharges edged up for total private (+158,000) and was little changed for government. Layoffs and discharges increased in professional and business services (+117,000) and in state and local government education (+20,000), but decreased in health care and social assistance (-35,000). The number of layoffs and discharges increased in the West region.
Net Change in Employment
Large numbers of hires and separations occur every month throughout the business cycle. Net employment change results from the relationship between hires and separations. When the number of hires exceeds the number of separations, employment rises, even if the hires level is steady or declining. Conversely, when the number of hires is less than the number of separations, employment declines, even if the hires level is steady or rising. Over the 12 months ending in August, hires totaled 67.0 million and separations totaled 64.7 million, yielding a net employment gain of 2.4 million. These totals include workers who may have been hired and separated more than once during the year.
InterpretationEconoday
- The comparison that’s most critical here is the number of unemployed actively looking for work, a number that is also compiled by the Labor Department and which stood at 6.234 million in August before moving sharply lower in the September employment report to 5.964 million. This gap between job openings and job seekers, which first opened up earlier this year, is hard evidence that labor is scarce.
- Other readings in today’s JOLTS report for August include a modest gain in the number of hires, to 5.784 million vs July’s 5.713 which also is far below the number of openings. The number of quits are closely tracked in this report as an early indication of wage inflation. But there’s no indication that workers are being pulled to higher paying jobs as quits slipped in the month to 3.577 million from July’s 3.608 million.
- Jerome Powell concedes that it’s a mystery why wages haven’t been going up very much as demand for labor grows and the supply of labor declines.Yet sooner or later, the law of supply and demand is bound to assert itself, at least this is the risk that the Fed is guarding against in its rate-hike regime.
Interpretation Rosenberg
Despite jumping to another record high in August the problem is that over the past 3-months JOLTS new hires (+37k) are lagging behind openings (+477k). Attests to NFIB theme of an acute lack of qualified labor. Classic late cycle.
— David Rosenberg (@EconguyRosie) October 16, 2018
Late Cycle vs Mystery vs Sooner or Later
- Fed chair Jerome Powell is mystified.
- Econoday proposes sooner or later wages will jump due to supply and demand.
- Rosenberg says It’s “Classic Late Cycle”.
The chart does not support “classic late cycle” as we did not see this behavior ahead of the last two recessions. But the data series does not go back that far.
That said, it is pretty clear we are very late cycle. I suggest that the “mystery” will be resolved, but not in the manner that Powell and Econoday expect.
Mike “Mish” Shedlock.
My company offered early retirement this spring. That decreased headcount ~20%. There are positions open for people with 2-5 years of experience. The company is very hesitant to hire anyone with more than 15 years of experience because they want to keep labor costs down. The company is also reluctant to hire anyone who needs to relocate, even if it is on the employee’s dime. Other large companies can’t be that different. A huge spread between bid and ask when it comes to labor would result in more openings than hires.
2-5 years of ‘experience’ corresponds to what H-1B visa applicants have, since they presumably would have completed the OPT visa program which gives them ~2-3 years of work experience. So when you see “2-5 years experience” requested, that means basically they’re looking for a foreigner and are trying to exclude otherwise qualified US citizen new grads.
Getting paid almost nothing has became a cultural American truism for so long, no one can possibly believe that paying workers more would ever fix a problem such as “low labor availability.” I have friends who are fully able to do any job, but still continue to work for Pizza Hut, Chase Bank, a school district and a non-descript warehouse for the typical $25k a year. They will never own a house or a car. You watch how fast they become available for $25 a HOUR plus benefits that non-skilled steel and auto labor used to pay (1980 wages).
I guess it would be to much to ask people to upgrade their skill levels in order to upgrade their standard of living. It would be better to just make $25 /hr the min wage instead. Govt to the rescue again. High paying non skilled labor is gone. There are still high paying non skilled auto jobs available but the time to get to max wage has been lengthened quite a bit. Do you think our country and standard of living will continue to rise when we remain uncompetiviteve in our labor market. People are supposed to better themselves not just be satisfied with a dead end job. If they want that its fine but do not expect them to have a great standard of living.
Why aren’t wages skyrocketing for skilled labour if that’s the problem, a shortage of skilled people? In fact, most of the job growth over the past 2 decades has gone to the unskilled. There’s tons of jobs available for the unskilled, ie: wiping bums at nursing homes, personal care, bartending and waitressing. But very few jobs for “skilled” workers, such as in factories, in STEM occupations, etc.
They’re going up for skilled labor quite a bit. Again it’s ancedotal but everyone i speak with has the same problem.
That’s not what the data indicates. Especially in STEM.
I am sure that they all own the latest iPhone that just came out with unlimited data (of course), drive late model SUV’s and always seem to have money to eat out, goto sporting events and vacation
Bullshit.
“Its a mystery why wages aren’t going up”??? NO mystery ,they are. The govt fake numbers don’t capture it. All you need is common sense which you must be relieved of before taking on any govt job. Anecdotal reports are rampant about wages having to be raised. Ask any business owner and you will find they cannot hire any competent people. Who wants to work when you can get free shit from whatever party is in power.
LOL. you have been watching too much Fox News.. The social safety net and govt entitlements have been slashed since the early 1980s. And “Medicaid”??? LOL, GOOD LUCK finding a competent doctor or specialist who will accept it (and will see you within the next 6 months
Most of the problems are actually at the low end, ie: waitresses and bartenders are demanding raises because they can’t feed themselves nor their families at minimum wage. There are oodles of unemployed skilled workers, especially STEM workers. Employers don’t even bother responding to applications from STEM workers in most cases as they’re overwhelmed with applicants.