On Tuesday, November 8, most of America will be tuned in hotly and heavily into watching news coverage about the presidential and congressional elections. After all, how the election turns out will dictate who runs the country and how the news flow is likely to be shaped in the public.
One economic report that will deserve a look is the co-called JOLTS report. This is the number of job openings, layoffs and turnovers in the United States. Each monthly JOLTS report comes with a one-month lag, so that means this will be a September report.
The reality is that the JOLTS report never really moves the stock or bond markets at all. What it does aim to do is to act as a confirmation tool that perhaps the number of job openings is on the decline. The prior number for August was put at 5.443 million job openings in the Bureau of Labor Statistics data, down sharply from the 5.831 million total job openings in July.
As a reminder, hiring data has been weaker in Labor Department data and in reports from regional Federal Reserve branches, ADP, ISM and elsewhere. Whether this holds true going back to September is something that has to be confirmed or refuted at the time, but the more recent reports covering October data probably would signal fewer openings or fewer turnovers in the economy in September.
The Labor Department’s JOLTS report tracks monthly changes in job openings and offers rates on hiring and quits, and JOLTS stands for Job Openings and Labor Turnover Survey. Each JOLTS report offers additional information on the labor market, such as the number of people quitting, who were fired and who decided to quit for greener pastures or other reasons.
One key lesson should be kept in mind for each JOLTS report. Yes, you must have millions of job openings for there to be a good labor market. But the strength of that number is often predicated on the number of people who quit their jobs.
As far as why quits matter so much, it is a measure of the worker-level confidence on their own employability and how they view the economy ahead, as far as how it pertains to their own well-being. In short, if workers are not comfortable enough to quit a job, then they are not that optimistic about their prospects or they are fearful enough about what may lie ahead that they prefer to stay put rather than look for other opportunities.
The JOLTS news release from October 12 covered the August JOLTS survey. That report said at that time:
- Job openings decreased to 5.4 million on the last business day of August. Hires and separations were little changed at 5.2 million and 5.0 million, respectively. The quits rate was 2.1% and the layoffs and discharges rate was 1.1%.
- The number of job openings decreased over the month for total private (−348,000) and for government (−39,000). Job openings decreased in a number of industries, with the largest changes occurring in professional and business services (−223,000), durable goods manufacturing (−29,000) and arts, entertainment and recreation (−28,000).
- The number of quits was essentially unchanged in August at 3.0 million. The quits rate was 2.1%. Over the month, the number of quits was little changed for total private and for government. Quits decreased in state and local government, excluding education (−13,000).
That term “little changed” appears a lot throughout this BLS report. Whether the numbers are really little changed depends on what metrics you care about and what the trend has been.