Yesterday’s JOLTS report for August showed a jobs market that is still just beginning to mend. Hires were up, and layoffs and discharges were down, which is good, but job openings and voluntary quits both declined.
We are far enough along past the worst of the pandemic jobs losses that it is worthwhile to compare the state of the various JOLTS components with the two previous recoveries from recession bottoms in the series’ histories (this is because the JOLTS data only dates from 2001).
In the two past recoveries:
- First, layoffs declined
- Second, hiring rose
- Third, job openings rose and voluntary quits increased, close to simultaneously
Let’s examine each of those in turn. In each case, I break out 2001-19 in a first graph and then this year in a second.
This first graph compares layoffs and discharges (blue) with the 4-week average of initial jobless claims (red):
You can see that, by the end of the recessions, layoffs were already declining and continued to decline steeply over the next 3-8 months before reaching a “normal” expansion level. The turning point coincides exactly with the much less volatile but more slowly declining level of initial jobless claims.
The same has been the case this year, as layoffs and discharges already declined to their “normal” level in May, while initial jobless claims peaked one to two months later and have been declining (slowly) ever since.
Next, here are hires (red) and job openings (blue):
You can see that actual hires started to increase one to two months before job openings.
This year, both made troughs in April, but hires rebounded sharply in May and June compared with job openings.
Finally, here are quits (green) vs. job openings (blue):
Actual hiring started to rise slightly before quits made a bottom.