The latest Job Openings and Labor Turnover Survey (JOLTS) report shows that the labor market remains resilient. In July, job openings ticked up for the first time since March 2022 and remain high by historical comparison. At the same time, the quits rate declined slightly and layoffs are low. Even if economic growth slows, today’s report shows the labor market remains strong.
Job openings per unemployed worker, a ratio the Federal Reserve has its eye on, rose to 1.98. Given the Federal Reserve wants to see this metric fall, today’s rise is not the direction it was hoping to see. Moreover, this increase underscores that some employers will continue to face hiring challenges. And with job openings at 11.2 million, employer demand for workers is still robust.
The quits rate, a signal of workers’ ability to leave a job, fell slightly to 2.7%. While lower than earlier this year, the quits rate is above where it was pre-pandemic and highlights that workers remain in the driver’s seat. Despite recent headlines, layoffs and discharges continue to be low in aggregate. Across every supersector, layoffs as a share of employment remain at or below their February 2020 level. Employers are holding on to workers even as the pace of hiring remains elevated.
While there are some signs of cooling, all in all the labor market is still hot. Layoffs remain low and the elevated quits rate and job opening continue to be signals of strength. Even if parts of the labor market are slowing, this report makes clear we are not in a recession.
