Layoffs, Quits, Job Offers, Hires: Twisted Labor Market Slight Weakening, Mass Quitting, and Job Switching

The Fed receives more material on rate hikes. Only retail is back to normal.

By Wolf Richter for WOLF STREET.

These are labor market data points that Fed Chairman Powell cites every time during post-rate hike press conferences in support of rate hikes. The data points are based on what 21,000 companies said about their hiring plans, actual hires, actual layoffs, voluntary resignations, etc., as the job market contorted in early 2021. Suddenly there was an explosion of deals job losses, record few layoffs, and large numbers of people quitting their jobs for better jobs, while companies aggressively hire poachers from other companies, leading to massive turnover and job skipping, and the largest wage increases in decades, which are now supplying additional fuel for already raging inflation, hence Powell’s focus on these data points.

Job openings fell, but remained in the astronomical range.

Job openings fell by 1.1 million in August to 10.0 million seasonally adjusted (and to 10.2 million non-seasonally adjusted), the biggest decline since the shutdowns. But the 10 million vacancy level is still well above the astronomical zone, up 41% from August 2019, according to data released today as part of the Job Vacancies and Job Turnover Survey (JOLTS). in English) from the Labor Office. Statistics, based on surveys of 21,000 companies.

So a slight softening in the labor market that still remains lopsided, with labor shortages continuing to hamper some sectors. Job openings did not fall equally across the board: They fell sharply in some sectors, but rose in others, including construction. The only big sector where job openings have returned to normal is “retail trade”. In all other categories, job openings were still well above their normal range. We’ll get to that in a moment.

Layoffs and layoffs increased, but remained near record lows.

The number of layoffs and layoffs rose slightly after two months of declines and remained in the all-time low range in data going back to 2000. The 1.46 million layoffs and layoffs in August were down 20% compared to the already very low level in August 2019:

And most of the people who are being laid off are finding new jobs quickly, and many of them already have a new job lined up before they leave their old job.

This is confirmed by a different data set, based on people applying for unemployment insurance at state unemployment offices and reported weekly by the US Department of Labor. Last Thursday, it reported that initial unemployment insurance claims they fell by 16,000 from the previous week to 193,000, near record lows, further documenting that most of the people who were laid off either already had a new job lined up or quickly found a new one. job, even before applying for unemployment insurance: another sign from a different point of view of how tight the job market remains:

Dropouts are on the rise again: there is still massive turnover and job skips.

The number of workers who voluntarily quit their jobs rose to 4.16 million, after four months of small declines, and was up 16% from record levels in July and August 2019.

“Quits,” combined with a high number of hires, are a sign of leaving and changing jobs, a sign that workers already have a better job waiting for them or that they are confident they can get a better job quickly. . Thus, these workers effectively arbitrage the tight labor market to get a job that pays more, provides better benefits, better hours, is closer to home, etc. And it’s still way above the good old days before the pandemic:

Hiring marked a bit.

Employers hired 6.28 million workers in August, seasonally adjusted, slightly more than in July and 6.3% more than in August 2019. Hiring depends on vacancies and being able to fill them, limited by the tight market labor, with most of the employees being workers who already had a job and were hired outside of other companies.

This shows that most of the 4.16 million people who voluntarily “quit” their jobs and most of the 1.46 million people who were laid off became part of the 6.28 million people who were hired. by other employers.

Job offers in the main categories of the industry.

Professional and business services.: This large industry category (22.4 million employees) also has the most vacancies. The category includes the subcategories of Professional, Scientific and Technical Services; Business and Business Management; Administrative and Support Services, and Waste Management and Remediation.

The number of job vacancies fell by 119,000 in August to 1.87 million, the second straight month of declines, but is still up 47% from August 2019 and remains in the astronomical zone, with labor shortages easing. slightly:

Information– This is a small category with only around 3 million employees, and it doesn’t really fit into the list of major categories and doesn’t affect the overall numbers much. But some of the small-scale layoffs that have been leaked through the media fall into this category: web search portals, data processing, data transmission, information services, software publishing, film and sound recording. , broadcasting, including via the Internet, and telecommunications. .

Job openings (always small and volatile) fell by 40,000, or 17%, in August vs. July to 197,000 (not seasonally adjusted), but remain above all pre-Launch records. pandemic:

Health and social assistance: Job openings fell by 236,000, the biggest drop on record. But at 1.72 million, they remain in the astronomical zone and are up 43% from August 2019 as reports of staffing shortages in the health system persist.

leisure and hospitality: Job openings fell by 111,000, continuing a trend, to 1.40 million, but still up 25% from August 2019, indicating that restaurants and hotels continue to make progress in staffing, but they still have a long way to go.

Retail trade: Job openings were already back in the normal range in July. In August, they fell by 143,000 to 803,000 openings, about the same as in August 2019, as retailers largely brought their staff back to where they were needed, after the big surge last year when they reopened entire categories of physical retailers. :

Education – as shown by state and local government job openings, which are primarily in education: Job openings fell by 58,000 from the previous month’s all-time high, to 888,000. This is up 42% from August 2019, amid continued reports of teacher shortages.

Manufacturing: Job openings fell by 115,000 to 795,000, but remain in an astronomical range, up 85% from August 2019:

Building: Job openings increased by 54,000 to 407,000, up 26% from August 2019. Yesterday we saw that single-family construction is slowing down a bit, but multi-family and non-residential construction is still growing:

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