JOLTS!

Just when you thought post-Covid economic data couldn’t get any odder, along comes another US econ numberwang to, errr, jolt you out of your senses. (Sorry, we’ll stop now).

An hour or so ago the Bureau for Labour Statistics released its monthly Job Opening and Labour Turnover (read: JOLTS) report, and the headline numbers are quite something.

The number of open job vacancies reached an all-time high of 9.3m, and perhaps perplexingly, the number of people who quit their jobs also reached a series high of 2.7 per cent of total employment.

Now, much has ink has been spilled by the commentariat of late about how the Biden administration’s generous support packages for those affected by the Covid crisis might have delayed their appetite to work. Particularly in low-wage, high Covid risk sectors like food service, entertainment and leisure. And, on the surface, the data certainly speaks to this.

Here’s three neat Bloomberg charts that FT Alphaville friend George Pearkes tweeted showing how the JOLTS data broke down across those particular sectors:

Cast your eyes to the top chart — the quits rate for leisure and hospitality was a staggering 5.3 per cent of all workers. There are really two ways to interpret this. Either you think workers are quitting because they don’t need to work thanks to government benefits (and are perhaps trading crypto on the side) or they’re getting better offers elsewhere which the second chart — the job opening rate — speaks to. In other words, it’s a sign of confidence in the labour market.

Stepping back, it’s worth mulling the headline job openings number in the context of US unemployment. According to Nick Bunker, head of research at employment site Indeed, there’s now roughly one job opening for every unemployed individual in the US.

So, in theory, workers are potentially now in a position where they can pick their next gig, rather than plump for the first one that makes them an offer.

A few other data points from earlier today back this up. Data from the National Federation of Independent Business (NFIB) found that 48 per cent of businesses were struggling to fill jobs, with just over a third of firms saying they’ve raised compensation to deal with this issue. Thanks to Yahoo Finance’s Sam Ro for sharing this chart on the Twittersphere, as for some reason CloudFlare has blocked us from the NFIB website (we’re nice, honest!):

Inflationista or not, it’s fair to say that we’re entering a pretty unique moment in US labour markets where, for the first time in many moons, business is on the back foot when it comes to hiring. Whether firms will deal with it via passing higher labour costs onto consumers (the NFIB report suggests as much), or attempting to raise productivity, remains to be seen. But, either way, it’s likely to be good news for the American worker.