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First Cut: January JOLTS numbers reflect tight labor market two months ago

The data on Job Openings and Labor Turnover for January tells us what we already knew, i.e. that the labor market was strong in the first month of 2020. Job openings were solid, the pace of hiring brisk, separations relatively few and stable, and that voluntary job leavers were active in a competitive market. However good this confirmation is, it has to be read in the context of more recent developments in which the potential for a serious downturn has grown along with the reach of COVID-19.

The level of job openings rose 411,000 to 6.963 million in January and the openings rate was 4.4%. This was off record highs in 2019, but not a lot.

The level of hiring was down 103,000 to 5.824 million in January and the rate was 3.8%. Both were on trend with the past year or so and solid in the historical context.

The level of separations was down 148,000 to 5.614 million in January as the uptick in layoffs toward the end of the prior year faded. The rate dipped a tenth to 3.7% as the rate has moved in a narrow range of 3.7%-3.8% for nearly two years.

Net turnover – hires less separations – rose 210,000 in January, also on trend with much of the past year. Hiring remained robust and layoff activity generally spotty in a few industries like retail.

Voluntary job quits – workers leaving one job whether a new one is lined up or not – were essentially unchanged at 3.532 million in January after 3.528 in December. The pace of job quits has been fundamentally unchanged since early 2019 with the rate at 2.3% in January, the bottom end of a narrow range of 2.3%-2.4% in place since June 2018.

The Beveridge Curve compares the rate of job openings to the rate of unemployment. It has reflected tight labor market conditions for the past two years

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