September 2018 JOLTS Report: JOLTS Continues to Show a Strengthening Labor Market
Demand for workers is strong and has reached levels where workers are feeling more empowered.
The data for September might look like a down month for the Job Openings and Labor Turnover Survey (JOLTS) report, but the underlying trend remains the same: demand for workers is strong and has reached levels where workers are feeling more empowered. This stronger demand is not specific to any one industry and is widely-felt.
The rate at which workers quit their jobs was unchanged in September, at 2.4% for all workers and 2.7% for private sector workers. While these rates haven’t moved much in recent months, the upward trend in quitting this year is a positive development for the labor market. When workers do leave a job, they are increasingly doing so on their own terms. For every worker who was laid off in September, 2.1 other workers quit their jobs.
Historic levels of job openings combined with low unemployment appear to be moving hiring toward workers already with a job. This combination of high demand and relatively low supply can be seen in the ratio of officially unemployed workers to open jobs. This ratio was 0.85 in September — an all-time low — and the 7th straight month that the ratio has been below one.
This story is holding up across industries as well. Only two of 12 major industries — construction and nondurable goods manufacturing — have ratios above one on average in September and the two months prior. The very tight labor markets in education and health services show up in a ratio of 0.49.
Despite its name, the September JOLTS report shows the steady nature of this recovery. While employers appear to be having a harder time filling them, 7 million job openings are still near record highs. And after an additional month of these data, the question still remains: how will employers try to attract workers to fill these positions, through wage increases or other forms of compensation?