December 3, 2024

The  Labor Department reported that job openings rose 402 thousand in October to 7,744 thousand after having declined 519 thousand in September.   The pace of economic activity has remained solid while the labor market has softened very gradually.  Job openings have fallen from their peak of 12,027 thousand in March 2022, but are still somewhat above the 7,000 thousand level that existed prior to the recession.

As shown in the chart below, there are currently 1.1 jobs available for every unemployed worker.  Prior to the recession this rate was steady at about 1.2.  So in some sense one could argue that the labor market today has returned to what it was prior to the recession.  However, if one looks at the decade prior to the recession there are typically fewer job openings than there are unemployed workers.  A  ratio of 0.6 would be regarded as normal during that period.

The Labor Department also provides information on hires each month.  Hires fell 269 thousand in October to 5,313 thousand after rising 147 thousand in September.  Despite the sizeable drop in openings, employment has slowed by a much smaller amount.  The labor market appears to be softening very gradually.

The rate of job openings rose 0.2 in October to 4.6 while the rate of hires declined 0.2 to 3.3.   Thus, the ratio of job openings to hires rose sharply in October to 139.%, which means that job openings continue to outpace hiring.  If that is true, employment should continue to climb in the months ahead.  Prior to the recession job openings were 15% higher than hires.

The quit rate rose 0.2 in October to 2.1 after having declined 0.1 in September.  The willingness to quit one’s job has declined for a couple of years as workers concern about slower growth occurring in the not-too-far-distant future made them slightly less willing to quit their job than they had been.  Prior to the recession the quit rate was 2.3.  It is slightly lower today than it was prior to the recession.

Stephen Slifer

NumberNomics

Charleston, SC