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In contrast to much other data in the jobs sector, the JOLTS reports have been very much consistent with a “soft landing scenario,” and that trend continued in this morning’s report for July.

As a quick refresher, this survey decomposes the employment market into openings, hires, quits, and layoffs. So to begin, here are job openings, hires, and quits all normed to 100 as of just before the pandemic:
 

Except for openings, which declined over -2% to close to their post-pandemic low, all of the other series were close to unchanged for the month. Since I regard openings are “soft” data, which have trended down for several years, but remained above their pre-pandemic levels, they are not of much concern to me. While the remaining metrics are all weaker than one year ago, their trend has been virtually flat for the past 11 months.

Now let’s look at several components are slight leading indicators for jobless claims, unemployment, and wage growth.

Layoffs and discharges, which have trended slightly higher since last summer, but have been rangebound since last autumn, remained so again (although if you are looking for a negative take, their three-month average is the highest since last autumn):
 

This generally accords with both the increase in the unemployment rate in 2023-24, as well as its plateauing this year (red, right scale), as well as the recent trends in new and continuing jobless claims (not shown), which, after a YoY increase earlier this year, improved in July and remained lower YoY in August.

Finally, the quits rate (left scale) typically leads the YoY% change in average hourly wages for nonsupervisory workers (red, right scale):
 

In July, the quits rate continued to remain steady at 2.0%, about average for the past 12 months. The latest data suggests that nominal wage growth will not decelerate further in the next several months and may increase slightly back to 4.0%.

To reiterate, the recent JOLTS reports have been consistent with the “soft landing” scenario remaining intact. In two days, we will get the jobs report for August. Because Trump’s partisan lackey has not been confirmed by the Senate (at least, not yet), I anticipate Friday’s report will not be skewed. As you know, last month, there were severe downward revisions. Since much of that had to do with unresolved seasonality in the education sector, and in August many of these people are rehired, I would not be surprised by an equally sharp rebound - but we’ll see. Further, the final QCEW revisions for 2024 will be unveiled later this month, and they are likely to be very substantial and further muddy the waters.

More By This Author:

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