JOLTS: Openings Structurally Higher, Quits Fall

Bottom Line:  The Job Openings Layoffs and Turnover Survey showed higher-than-expected job openings in April. But importantly, the quit rate continued lower, suggesting employees are less confident that the labor market is so tight they can quickly get a new job if they leave their current job. Openings rose the most in education and healthcare, with solid gains in the trade and transportation sector, as well. Lagged relative to most labor reports and our nowcast forecasts, the JOLTS survey is helpful in its detail and has often been cited by Fed officials in recent years. The quit rate has been a particular focus of Fed Chair Powell. While the increase in openings is a concern, potentially suggesting that the labor market tightened in April, the quit rate likely offers more insight than the level of openings. Job openings are cheap to advertise, with many employers leaving advertisements on digital platforms out even though they have little intention of filling the role unless the perfect candidate comes along. Thus, openings are structurally higher in this cycle (and probably much longer) relative to total employment. Overall, the details of the JOLTs report, especially the quit rate, suggest the historically tight labor market continues to slacken slowly.