April’s Payroll Jolt, Because Unprecedented Number Of Workers Just Quit?

April 2021’s payroll estimate (CES) was the “bad” one; at a revised +278,000 it was “supposed” to have been significantly better than the “good” one for March (+785,000, revised). Near three hundred thousand in any month before 2020 would’ve been celebrated as a near miracle (that’s just how bad the labor market has been for a long time). What made it so worrisome, then, was that already in a deep hole we just can’t afford to take several more years at such a reduced rebound to get out of it (because by then it’ll be clear we aren’t going to, not in any meaningful way, just like the last time).

We can and have reconciled, so to speak, the headline CES payroll figures with the BLS’s other major labor market data in JOLTS (along with jobless claims). The latter, estimates on monthly turnover, have in the past plotted to very nearly the same numbers (once you account for a constant discrepancy).

Even though JOLTS is one month further in arrears, when we match them up together it does give us some idea as to “why” payroll levels changed in the way the BLS thinks they have. For April 2021’s huge miss, what the latest JOLTS estimates for the same month, released today, show is that, first, the payroll decline from March was only somewhat larger than what the net turnover indicated, and, second, that using turnover it appears the primary reason for the slowdown was an enormous, out-of-the-blue increase in the number of employed Americans who just up and quit their job.

Never seen anything like this before, and this wasn’t even the most jaw-dropping series for April 2021 JOLTS. If anyone is interested in highly unusual data, get a load of Job Openings (JO):

We have to start by pointing out the huge difference between the BLS views on JO and other data sources such as the Conference Board’s (whose actually declined a tiny bit in April from March).

It’s almost comical at this point, how the BLS JO figures once again directly feed the same LABOR SHORTAGE!!! narrative. Companies, so it’s being said, are absolutely desperate to find any workers at all income levels. So frantic are these businesses that, according to JOLTS, the seasonally-adjusted level of posted job openings increased by almost exactly a million during April alone; from an already not-even-close record high of 8.29 million in March to then 9.29 million.

This was, remember, the same month as the huge payroll miss.

That’s because on the other side of the equation, hiring, or HI, companies continue to add to staffs at a rate that more resembles 2019 and its recession “scare” (which wasn’t a scare). According to JOLTS for April, HI barely increased from March, each only a touch more than 6 million. When adjusting for population, that’s somehow less than what happened during the lackluster mid-2000’s.

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Disclosure: This material has been distributed for informational purposes only. It is the opinion of the author and should not be considered as investment advice or a recommendation of any ...

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