Chart Of The Day: JOLT Survey And The Peak Of Employment
David Rosenberg noted this morning that: "There are few reports that come out monthly with as much information on the employment situation than the JOLTS data (Job Opening Labor Turnover Survey) from the BLS. It shows the churning and turning that goes on beneath the surface of the headline payroll data. And what we saw transpire in August left much to be desired, that much is for sure. Job openings fell 32,000 (or -0.9% MoM) to 3.561 million and down for a second month after a 129,000 (-3.5%) drop the prior month. Job openings now stand at their lowest level in four months.
Layoffs are accelerating too with the 266,000 surge in pink slips - the most in a decade and taking the level to a three-month high. It was encouraging to see new hires rise 112,000 (+2.6%) to 4.39 million, but in all honesty, this followed two months of sharp declines which left the level some 71,000 lower than they were in May. This survey also monitors how many people quit their job in the hopes of finding a better one - a proxy for worker confidence - and this metric sagged 23,000 in August and was negative for the second month running. This sheds some light on what seemed to be a bit of a confusing jobs report released last week - the employment picture is still, to be polite, quite muddled."
The chart above shows employment, the four month average of "net hires" which is hires less separations, and the four month average of hires less job openings. There are two clearly evident trends developing. The first is that the hires less jobs openings is now at levels that have historically been consistent with peaks in employment. If this metric begins to rise sharply we should begin to see total employment begin to decline. Secondly, the average of net hires has likewise peaked. If this metric turns down from current levels of consolidation it will also confirm a peak in employment.
As politely suggested by Rosenberg - this data is certainly not consistent with the latest employment report from the BLS or the first time jobless claims report. We are likely to see both of these reports revised in the months ahead.