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First Cut: November Job Openings and Labor Turnover moderate, but still robust

The data on Job Openings and Labor Turnover for November was broadly softer than the prior month. However, the levels remained elevated and consistent with a tight labor market.

The level of job openings fell to 6.888 million, down 243,000 from October. If the reading is off the record high of 7.293 million in August, it by no means suggests that job openings are other than plentiful. The job opening rate was down a tenth to 4.4% but is also just under recent historic highs.

New hiring was at 5.710 million in November, down 218,000 from the prior month. The hire rate was down two-tenths to 3.8%. The slackening pace of hires is probably more of an artifact of two major hurricanes and wildfires in the West that cut into business activity.

Separations were down 214,000 to 5.507 million in November and probably was due to diminished contraction in a few sectors like retail which has seen a large number of stores consolidated or closed in 2018. The rate of separations declined a tenth to 3.7% in November.

Net turnover – hires less separations – was up 203,000 with the pace of separations more than offsetting the decline in hiring.

Voluntary quits are a subset of separations and are an indication of workers’ confidence in the job market as they are more active in leaving one job even if they do not have another lined up.  Quits were down 112,000 to 3.407 million in November, and lower for a third month in a row. It is possible that the decline could mean that recent increases in wages and benefits are persuading more workers to remain in their present employment rather than an expression of less faith in finding a new job. The quits rate was steady at 2.3%.

The report reinforces that even at a lower reading, there is very little slack remaining in the labor market. In turn, this could continue to bring in workers at the margins who might have been previously discouraged about finding a job or tempt others who have voluntarily left the workforce to return with prospects of better wages and benefits.

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