JOLTS Sept 2024: Solid but Lower, Signals for Payroll Day?

The JOLTS release finally posted Job Opening slightly below the peak level under Trump from Nov 2018.

Oct 29, 2024

Post election separations forecast? Let me change into my work clothes….

Last month saw very solid JOLTS numbers just ahead of the ensuing payroll bounce that sent the UST into backpedal mode, but this month shows a sequential decline in Job Openings, Hires higher, Layoffs/Discharges higher, and Quits down (see Payroll Sept 2024: Rushing the Gate 10-4-24, JOLTS Aug 2024: Openings Up, Hires Down, Layoffs Down, Quits Rate Down 10-1-24).
There is not much of a surprise that jobs have been resilient, but we think the term “little changed” should not have been applied so freely this time in the release with Job Openings at 7.44 million, down from a revised 7.86 million (revised from 8.04 million), and that finally takes the number below the Trump Job Openings peak of Nov 2018 at 7.5 million.
Among interesting increases in Layoffs/Discharges was Manufacturing/Durables where we saw similar action in Hires with the ups and downs of industry groups moving around.
The Quits rate ticked down again to 1.9% vs. 2.3% last year with the mix of Quits in overall separations moving closer to the long-term median.

The above chart updates the Job Openings trend line as it continues downward. There is a 1-month lag in the JOLTS, and the very strong Sept payroll numbers that roiled the UST market show up in part in this trend line (i.e. some jobs got filled). We could speculate on how potential employers are playing the election at this point since the stark differential in economic policies could fall harder on some tariff-exposed sectors than others. In other words, they need to know the winner.

Some will also be waiting to see what their needs may be in some work forces since the commentary reiterated this week in Madison Square Garden promise “the largest mass deportation program in history” and will start on “Day 1.” That would entail a material increase in separations that is hard to contemplate in terms of timing or industry.

Which states, cities, and industries will be targeted first will be a matter of conjecture. There is always the possibility of targeting opponents for maximum economic disruption and to promote violent conflict as an excuse to deploy military and “make a statement.” The fear factor could also send “Quits” soaring for very different reasons of “flight” vs. other job opportunities. Stay tuned.

The above chart updates Hires vs. Layoffs/Discharges. We adjust the chart to remove the COVID distortions for better visuals on the “normal” periods. We detail some of the wild swings during COVID in a text box further below. We see both Hires and Layoffs above the long-term median. Hires are more notably moving lower from the earlier Job Openings peak.

The above chart updates the ratio for the Hires to Layoffs/Discharges. At 3.03x, the relationship is now back to the median level and down from the 5.1x peak of late 2021. The COVID wipeout saw a ratio of 0.4x.

The above chart updates the running totals of Hires vs. Separations. Hires are running well ahead of the long-term median and by a greater increment of around 2x the Separations are running higher than the long-term median.

The text box above is used to look back at the crazy high numbers during COVID that included over 16 million separations in March 2020. In all seriousness, the mass deportation game plan has included numbers from Trump as high as 21 million. The estimate also included 2 million as well, so we are starting to grasp the now well-known exactitude of Trump’s economic planning.

The big difference in someone losing their job or just quitting is that the dollar cost and demands on personnel, as well as the logistical complexities of mass deportation. The challenge has defied estimates that run from high to higher to highest. Billions in dollars and the mass use of manpower and logistical assets are required for such a program.

The above chart updates the Hires minus Separations differential. We see a number at 362K still well in excess of the long-term median of 198K.

The last metrics posts the % mix of Quits in the Separation bucket. At 59.1%, the mix is just above the long-term median. For the “Quits Rate” on a SAAR basis (Quits % Total Employment), the percentage is down to 1.9% from a revised 2.0% in Aug and 2.3% in Sept 2023. On a not seasonally adjusted basis, the Quits Rate was +2.0%, down from a revised 2.6% in Aug 2024 and 2.5% in Sept 2023.

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Footnotes & Flashbacks: Asset Returns 10-27-24

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Durable Goods Sept 2024: Taking a Breather 10-25-24

New Home Sales: All About the Rates 10-25-24

PulteGroup 3Q24: Pushing through Rate Challenges 10-23-24

Existing Home Sales Sept 2024: Weakening Volumes, Rate Trends Worse 10-23-24

State Unemployment Rates: Reality Update 10-22-24

Housing Starts Sept 2024: Long Game Meets Long Rates 10-18-24

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