After the June employment report, I argued that quits and openings pointed to an unemployment rate just about where we were at the time (6.1%), once adjustments were made for demographic comparisons and the remaining inflation in the unemployment rate stemming from VLTUE. Since then, the unemployment rate has dropped 0.3% and momentum in hires, quits, and openings confirm the strength of that drop.
Thursday, November 13, 2014
September JOLTS come in strong
September JOLTS confirm recent strength in employment. Hires and quits jumped and job openings remained strong. Taken together, openings and quits suggest a labor market similar to mid-2005, when the unemployment rate was at about 5%. Recent strength in both of these measures suggests to me that the approx. 0.8% of the unemployed who are very long term unemployed (VLTUE) are not aggressively involved in the labor market. The strong trends in quits and openings makes me more confident that the slow decline in VLTUE will continue and also that recent trends in regular unemployment declines will continue. We might see the current pace of a monthly drop of 0.1% or more continue for a few more months before the trend flattens out.