Jobs, Job Openings, & Jobless Claims

Week in Review: August 29 - September 2

Zack here, filling in for Anirban so he can get an early start on the long weekend (talk about Quiet Quitting, right?). Fittingly, the week leading into Labor Day weekend was all about labor market data, and you can read Anirban’s thoughts on today’s jobs report in this post from a few hours ago.

Monday

Global Risks

There’s never data releases on Monday, so I’ll briefly mention that 1) Europe is dealing with really, absurdly high energy costs, which could be catastrophic come winter and has already caused a lot of firms to halt operations, and 2) China’s carbon emissions fell 8% during the second quarter according to CarbonBrief, which while good for the environment is an extraordinarily bad sign for their economy (construction projects started fell 44% during the second quarter).

Tuesday

Housing Price Indices

The FHFA House Price Index tells us home prices increased 17.7% from Q2 2021 to Q2 2022. The S&P CoreLogic Case-Shiller U.S. National Home Price Index (what a terribly long name) showed a 18% year-over-year increase as of June. On a monthly basis, home prices increased 0.3% (seasonally adjusted). These indicators refer to June and don’t tell us anything we didn’t know—houses are really expensive at the moment.

Job Opening & Labor Turnover Survey (JOLTS)

July’s JOLTS data dashed any hope that the labor market had started to ease; job openings jumped back above 11.2 million after falling in June and are still up more than 4 million (+60%) since the start of the pandemic.

There is a tiny bit of good news here: just 2.7% of workers quit their job in July, which is the lowest rate since May 2021 (but higher than at any point before 2021). Employers are still feeling clingy, though, with the layoff/discharge rate unchanged at 0.9% for the seventh straight month. Before October 2021, U.S. employers had never laid off/discharged less than 1% of the workforce in any given month.

The upshot: employees are empowered to quit in search of greener pastures, with an emphasis on greener; workers who switch jobs are getting massive pay increases (more on that under the ADP report on Wednesday). Employers, on the other hand, are feeling pretty clingy; current employees are less expensive and generally more productive than new employees, and that’s provided you can even find a new one.

A few months back, we said that the graph of the quit rate and layoff/discharge rate looked like a profit-eating monster. That’s still the case, so I added eyes to really drive home the visualization.

Conference Board Consumer Confidence Index®

This measure of consumer confidence increased in August after falling in the previous three months. Both components of this index increased, but the sub-80 reading for the Expectations Index indicates ongoing risk of recession. Big picture, consumer confidence isn’t that low (roughly the same as it was in 2017) but remains well below pre-pandemic levels.

Wednesday

ADP Employment Report