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By New_Deal_democrat September 9, 2015 11:41 am
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JOLTS report suggests late stage US jobs expansion

I am developing something of a rare substantial disagreement with Bill McBride a/k/a Calculated Risk (and the Nicest Guy in the Econoblogosphere) about the JOLTS reports.  Bill termed today "another solid report."  I respectfully disagree.

 
We only have one complete past cycle of these reports, so their significance has to be weighed against the short duration of the series.  But in the past cycle, hiring peaked first, followed shortly thereafter by quits.  By contrast, job openings continued to increase until peaking in 2007.  The same order looks like it is taking place now.
 
First, here are job openings (red) and hires (blue) since the beginning of the series:
 
 
That hires peaked well before job openings is obvious.
 
Now here is view zoomed in on the last year:
 
 
 
Not only have hires stalled out, but for the first time during this expansion they have gone negative YoY.
 
Here is a view zoomed in on the same pattern in the last cycle, showing that while job openings continued to increase, hires first turned negative YoY in August 2006.
 
 
Parenthetically, with a 10.3% U6 unemployment rate, this is not because of a lack of skilled applicants.  I suspect the huge (1 million!) disconnect between openings and hires represents employers refusing to increase pay in order to hire available workers.
 
Next, let's look at quits.  Like hires, quits peaked well before the end of the last expansion:
 
 
Note they have stalled out recently.
 
Here is the view zoomed in on quits during the last year:
 
 
and a view zoomed in on the first time quits turned negative YoY in September 2006:
 
 
Quits are now below where they were 10 months ago.
 
In short, the pattern in the JOLTS report is similar to where it was about 16 months before the onset of the last recession.
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