Along with all the other reports, yesterday the JOLTS survey was updated for February. This survey decomposes the employment market into openings, hires, quits, and layoffs, and so gives a more granular view. The question over the past year has been whether they best describe a “soft landing,” or “hard” one ending in recession.

Additionally, several components are slight leading indicators for jobless claims, unemployment and wage growth.

In February the news was mainly good, as most categories stabilized.

First, here are openings, hires, and quits all normed to 100 as of just before the pandemic:

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Openings, which are “soft” data and have generally uptrended going all the way back to the turn of the Millennium, remain above their pre-pandemic levels, but this is not terribly significant. Both hires and quits fell below their pre-pandemic levels at the beginning of last year. But the far right end of the graph suggests stabilization, which is even more apparent when we zoom in on the past 12 months:

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Openings are virtually unchanged from their level 10 months ago. Hires have been very stable since last July, and Quits have been stable since August. In fact on a 3 month average basis, both Hires and Openings have remained within a 1% range.

This is good news. It says “soft landing” (barring political own-goals in Washington like massive tariff wars, of course).

One item of concern in the report was layoffs and discharges, which increased to their highest level in almost two years excluding last September:

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This is of a piece with the uptick in new jobless claims (red, right scale) we have seen in February and March, which in turn suggests there may be some upward pressure on the unemployment rate in the coming months.

Finally, here is the update on the quits rate (right scale) vs. the YoY% change in average hourly wages for nonsupervisory workers (red, left scale):

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While the quits rate has been stable since last August, it did downshift from earlier in 2024. Average hourly wages have not yet reflected that downshift, but the likelihood is that they will follow, down to a YoY growth rate of about 3.6%-3.7% in the coming months.

To sum up, the coincident reporting in the JOLTS data indicates “soft landing” so far, while the short leading components suggest weaker employment data in the next few months.

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