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The labor market softens again. Job openings drop and quits are below the pre-Covid level.

Job Openings and Labor Turnover JOLTS

The Job Openings and Labor Turnover Summary for July shows some sobering trends.

• At the March 2022 peak, there were 12,182,000 job openings vs an unemployment level of 5,993,000. There were more than two openings per those unemployed.
• There are now 7,637,000 opening vs an unemployment level of 7,163,000.
• At the current rate of labor deceleration, openings will soon be less than the number of unemployed.

Openings and Quits Revised Lower, Layoffs Higher

• The number of job openings for June was revised down by 274,000 to 7.9 million.
• The number of hires was revised down by 93,000 to 5.2 million, and the number of total separations was revised down by 11,000 to 5.1 million.
• Within separations, the number of quits was revised down by 68,000 to 3.2 million.
• The number of layoffs and discharges was revised up by 62,000 to 1.6 million.

Job Openings, Hires, Separations, Quits

Quits are voluntary separations. The number of quits is below the pre-Covid level.

Quits by Sector

People are not quitting because there are fewer jobs to go to and new hires will generally be among the first to be discharged when layoffs hit.

Quits are elevated in education and health services. Those jobs have been elevated to handle the surge in immigration.

Manufacturing quits are above pre-pandemic levels despite the fact manufacturing is not exactly humming. Some of this may be retirements and some may be related to Inflation Reduction Act spending.

Construction quits is telling.

Construction Spending Growth Slows in May, Stops in June, Negative in July

Yesterday, I noted Construction Spending Growth Slows in May, Stops in June, Negative in July

Also note ISM Index Little Slightly Better But New Orders and Production Contracting Faster

Fed Does Not Seek or Welcome Further Labor Market Cooling

On August 23, Fed Chair Jerome Powell said the Fed Does Not Seek or Welcome Further Labor Market Cooling

The market is cheering the Jerome Powell’s self congratulatory and market friendly speech at Jackson Hole. “Your mileage may vary,” said Powell. Indeed.

Further labor market cooling is coming anyway.

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