Four charts from the most important jobs report you aren’t following
The most important jobs report you’ve probably never heard of was released this morning by the BLS. The “Job Openings and Labor Turnover Survey” demands your attention if only for its acronym, JOLTS. Janet Yellen pays close attention to it, and with good reason.
The survey tracks the number of job openings and hires in the US, which are fairly obvious indicators of the strength of the labor market. It also tracks an important, if slightly more subtle, indicator: turnover. The BLS calls these “separations,” and the number measures people who’ve quit jobs, been laid of, or otherwise left involuntarily.
The JOLTS numbers released this morning showed “3.9 million job openings on the last business day of September, little changed from August”, and the hiring and separations rates were essentially unchanged as well. More people getting laid off is bad news, of course, but more people quitting their jobs is actually a very good sign. People tend to quit their jobs when they feel more economically secure or positive about the job market.
Here are four charts from the BLS that put today’s release in context:
There are just under three unemployed people per job opening. Before the recession, the ratio was well below two-to-one.
The number of job openings has been rising steadily for the last four years, but is still below pre-recession levels.
Generally, as job openings rise, unemployment falls. The purple line shows that relationship after the financial crisis.
The number of people quitting their jobs is inversely related the number leaving involuntarily.
Or, as the BLS says:
Quits are generally voluntary separations initiated by employees. Quits are procyclical, rising with
an improving economy and falling with a faltering economy. Layoffs and discharges are generally
involuntary separations initiated by an employer and are countercyclical, moving in the opposite
direction of quits. The ratio of the number of quits to the number of layoffs and discharges
provides insight into churn in the labor market over the business cycle.