Job Quits from BLS Job Openings and Labor Turnover Survey (JOLTS), chart by Mish

Job Openings and Labor Turnover Summary

Quits analysis of the JOLTS Report for April 2023, shows significant weakening in labor leverage.  

Quits are generally voluntary separations initiated by the employee. Therefore, the quits rate can serve as a measure of workers’ willingness or ability to leave jobs.

Quits by Sector

• Leisure and Hospitality: Quits are above the 2020 pre-pandemic levels but have dropped well below the 2019 highs for two consecutive months.
• Retail Trade: Quits have dropped below the 2020 pre-pandemic high.
• Construction: Quits are above the 2020 pre-pandemic levels but have dropped well below the 2019 highs for eight consecutive months. Quits hit a high of 260,000 in March of 2022.
• Manufacturing: Quits remain elevated compared to pre-pandemic levels but have fallen sharply from a peak of 339,000 in March of 2022 to 244,000 in April. That's the fewest number of quits since October of 2020.

Across the board, there is general weakening in the propensity to hop jobs for increased pay or benefits. 

Hires vs Nonfarm and Private Quits 

Job Hires and Quits from BLS Job Openings and Labor Turnover Survey (JOLTS), chart by Mish

Hires and quits are trending much lower. Both are nearly back to pre-pandemic levels. 

2001 and 2006 show recessions start when there are sustained declines like we have seen. 

Labor Leverage Ratio

Mish Calculation: Quits / Layoffs + Discharges

The Labor Leverage Ratio (LLR) is the number of quits divided by the number of discharges, firings, and layoffs initiated by employers. 

The LLR is down from a high of 3.36 in November of 2021. It fell back to pre-pandemic levels last month but is up a bit this month to 2.40.

Job Openings, Hires, Separations, Quits

Job Openings, Hires, Separations and Quits from BLS Job Openings and Labor Turnover Survey (JOLTS), chart by Mish

Total separations include quits, layoffs and discharges, and other separations

Job Listings Abound, but Many Are Fake

Openings are down from a record 11.755 million to a still very elevated 10.103 million. 

The Wall Street Journal reports Job Listings Abound, but Many Are Fake

A mystery permeates the job market: You apply for a job and hear nothing, but the ad stays online for months. If you inquire, the company tells you it isn’t really hiring.

Not all job ads are attached to actual jobs, it turns out. 

Too many analysts rely on job openings as a sign of labor market strength. That WSJ article was from March of 2023. It's undoubtedly still true.

Why Do Employers Post “Ghost Jobs”?

Image courtesy of Clarify Capital.

Missing Reason

Because it's free, stupid! There is no cost to posting ghost jobs.

The benefits are obvious: Employers can placate overworked employees, keep them motivated, give an impression of growth, and just in case.

A focus on quits and the Workers' Leverage Ratio is a much more compelling story. 

Manufacturing ISM Contracts 7th Straight Month, New Orders Down 9 Months

In another sign of economic weakness, please note Manufacturing ISM Contracts 7th Straight Month, New Orders Down 9 Months

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