Big Red Car here with a prayer on my lips for the Carolinas and the impending Florence hurricane. Evacuate if y’all are along that coast. Do not risk your life to ride it out.
So, one of the most interesting elements of the current economy is the status of jobs and job openings. Unfortunately, we do not have sufficient data to track this back through prior business cycles because the data was simply not collected back in the day.
There are four data points of interest:
1. Job openings – positions for which a company is seeking an immediate hire
2. Hires – former job openings for which a company made a hire
3. Quits – current employees who voluntarily left a job with a company
4. Layoffs and discharges – company terminated jobs and firings
Jobs, the data
This graph shows the picture going back to 2000.
Jobs – bottom line it, Big Red Car
As you can see, there are almost 7,000,000 job openings currently. Compare that to the end of the last recession in 2010 when there were fewer than 2,500,000 job openings.
The annual rate of hiring continues to increase and would likely be even higher if there was more labor available. At less than 4% unemployment, there may not be sufficient supply of workers to fill these jobs.
People are quitting at an increasing rate because there are alternative employment opportunities for them to go to. Quitting jobs can be a good thing because it shows career advancement and upward employment mobility in the economy.
Layoffs and discharges are flat in the face of an increasingly employed labor force. Employers don’t have the luxury of firing people. The economy is not creating the necessity for layoffs. These are signs of a very healthy economy.
So, there you have it, dear reader, proof of how robust this economy is at the granular level. There are lots of job openings and a stable level of layoffs and discharges.
As the labor market continues to tighten, employers are going to have to increase current and prospective wages to attract talent. The magic is working.