November JOLTS Report Shows Surprising (Relative) Weakness

The JOLTS report on labor is noteworthy and helpful because it breaks down the jobs market into a more granular look at hiring, firing, and voluntary quits. Its drawback is that the data only goes back less than 20 years, so from the point of view of looking at the economic cycle, it has to be taken with a large dose of salt.

With that disclaimer out of the way, Monday's JOLTS report for November was surprisingly soft relative to the strength of the overall jobs gain for that month, as it show most of the series continuing to decline from their August peaks (in the case of hires, October):

  • Quits declined for the 3rd month in a row, and are about 7% off peak.
  • Hires declined were about 3% off their peak set one month ago.
  • Total separations are off 5% from August.
  • Job openings are a little less than 5% below August.
  • Layoffs and Discharges are up 7% from their recent low (a bad thing), and had one of their three worst months in the last year.

Let's update where the report might tell us we are in the cycle.

First, below is a graph, averaged quarterly through the third quarter, of the *rates* of hiring, quits, layoffs, and openings as a percentage of the labor force since the inception of the series (layoffs and discharges are inverted at the 3% level, so that higher readings show fewer layoffs than normal, and lower readings show more):

During the 2000s expansion:

  • Hires peaked first, from December 2004 through September 2005
  • Quits peaked next, in September 2005
  • Layoffs and Discharges peaked next, from October 2005 through September 2006
  • Openings peaked last, in April 2007

By contrast during and after the last recession:

  • Layoffs and Discharges troughed first, from January through April 2009
  • Hiring troughed next, in March and June 2009
  • Openings troughed next, in August 2009
  • Quits troughed last, in August 2009 and again in February 2010

Now here's what the four metrics look like on a monthly basis for the last five years: 

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