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First Cut: JOLTS data for October continues to reflect vibrant labor market

The data on Job Openings and Labor Turnover for October continued to reflect a vibrant labor market with plentiful job openings, solid hiring, few layoffs, and high numbers of workers leaving one job for another.

The number of job openings rose 235,000 to 7.267 million in October, recovering most of the decline in the prior month. The job openings rate rose two-tenth to 4.6% in October, similar to the trend that has market 2019 to-date and consistent with plentiful open spots to fill.

The number of new hires fell 187,000 to 5.764 million in October. There may have been some impact from the UAW strike here in that businesses in the auto and related sectors may have delayed filling some jobs until after the conclusion of the job action.

The number of separations was down 162,000 to 5.636 million in October. In the pre-holiday period, businesses were holding on to workers. There were fewer separations in retail (-109,000) and wholesale (-33,000). The number of workers voluntarily quitting jobs — a subset of separations — was up 41,000 to 3.512 million.

Net turnover — new hires minus separations — was up 128,000 in October as the low pace of separations was sufficient to offset the decline in hiring.

The Beveridge Curve as of October pretty much tells the tale of the strength in the labor market. The unemployment rate versus the rate of job openings is consistent with many months of large numbers of job available and little slack to fill those spots. Chair Jerome Powell characterized the labor market as strong rather than tight with more slack than previously thought. If this is the case, the Beveridge Curve could be in for a long period of exceptional readings.

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