JOLTS Steady In November

by: Bespoke Investment Group

November data showed another solid month for the labor market as measured by the Bureau of Labor Statistics' Job Openings and Labor Turnover Survey (JOLTS). Below we show charts of openings and the separations rate (quits, transfers, retirements, layoffs, and other job exits as a percentage of the labor force) and the number of job openings, which recovered somewhat from the large drop in openings seen in October data, but are still trending down from their highs in early 2015.

Click to enlarge

The rate of job openings remains off its multi-year highs but posted another strong month in November at 3.7%, well above the highs seen in the last economic expansion. Private openings were flat MoM and have been trending lower in the last few months.

Click to enlarge

The quit rate returned to a post-recession high of 2.0% for the total labor force and 2.2% for the private labor force but is yet to break out. The current quit rate indicates that the existing employed population is not yet being enticed away by better opportunities at other employers, a key ingredient for wage growth to build.

Click to enlarge

Labor demand remains extremely strong as measured by the layoff rate, which is above recession lows but still negligible for the total labor force; the private layoff rate returned to normal after "spiking" to a measly 1.4% last month.

Click to enlarge

Quit rates for high turnover industries continue to improve slowly but like the broad quit rate has not by any means broken out over the last year or so. Regional views of layoff rates show no concerning upticks.

Click to enlarge