Job Openings & Labor Turnover: Clues To The Business Cycle - Tuesday, Feb. 12

Openings

Hires

Quits

Layoffs

Where Are We Now in the Business Cycle?

Based on the six-month moving averages, we can see that:

  • The Openings are near its record high and the moving average has been above the hires levels for the last three-plus years.
  • Hires are above their pre-recession peak and near its all-time high.
  • Quits are above their levels of last two recessions and near its all-time high.
  • The Layoffs and Discharges series is near its all-time low.

The Trend in Quits

To reiterate a previous point: Increases in Quits suggest employment flexibility. Quits tend to be inversely correlated with Layoffs & Discharges, which are associated with business cycle weakness. Following the last recession, Quits began increasing in 2010, and the rate accelerated in 2013 and has continued to rise. Layoffs & Discharges fell post-recession and leveled out for a few years and has continued its decline.

Quits versus Layoffs

It would, of course, be excellent if we had historical JOLTS data stretching back through several business cycles. But alas we do not.

The JOLTS reports will be interesting to watch in the months ahead. But the volatility of the data, which is also subject to revisions, encourages caution in taking the data for any given month very seriously.

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