Job openings and the number of times workers quit reached the highest levels on record in March, as a shortage of available workers continued to pressure the U.S. labor market.
Sure, this is true, and the BLS press release even said so. But who cares? Quits always go up when hires go up. Here's my inevitable chart:
The recent record for quits as a percentage of hires was 68.26% in December. In March it was 67.33%. Not a record. And anyway, with the exception of the pandemic era, the trendline for quits as a percentage of hires has been rock steady for over a decade. There's absolutely nothing unusual going on right now.
Quits are going up a lot faster than hires -- Baby Boomers, amirite? FWIW, last December Retail trade Q/H = 87%.
The ratio has increased 25 percentage points in 14 years. In 2036, 90% of people hired will be quitting.
It’s simply not true that there’s nothing unusual going on! Lots of people are quitting their jobs and getting new ones - more than we have any record of, as a percentage of the workforce.
I get that you’re pushing back against the “Great Resignation” narrative that lots of people are giving up on work, since this resignations are almost entirely driven by people getting new jobs. But it’s not normal for people to be quitting their jobs to get new ones this much! That’s not the same as “people are giving up on work” but it’s still something unusual!!
Yeah, this ^.
Just because it's "on trendline" doesn't mean it's normal.
Oh goodness! A chart with a line, I guess there's nothing unusual going on.
It might sound unusual if someone grew to be 25 feet tall, but if you draw a line charting growth beginning at age 0 and 20 inches, you will eventually get to 25 feet at some point....and because you have drawn a line, it won't be unusual. If it occurs to you that we have never seen a 25 foot person before, just remember that its on the line you drew.
A 200 year old person isn't unusual if you draw a line from age 1, to 2, to 3....all the way to 200.
Lines!
It looks like your chart shows that quits and hires are becoming increasingly correlated since the 2008 crisis. A possible interpretation is that it's becoming harder to hire anyone unless they've quit a job. It was half true then and it's 2/3 true now. Could mean that fewer people are entering the labor market (and/or more people are leaving) relative to job creation. Isn't that the "shortage of available workers" that the WSJ is on about?
There is evidence that in some states in the US, teacher retirements have increased dramatically. At the same time, education majors have been graduating in far fewer numbers. I think we can expect that in many states in the education sector, the job recovery after the pandemic will look very different.
The fact that things are falling on the same old straight line since the bottom of the 2007-9 recession does have implications for inflation. Even before 2020 unemployment decreased linearly to well below the NAIRU level which was supposed to trigger the inflation apocalypse. Quits/hires ratio is similar. Why should the supposedly tight job market - on the same old trend - suddenly cause inflation now? And as I have been saying and Kevin too, nominal wages are not actually keeping up with inflation. Wages fell behind even faster in the oil-caused inflation spikes of 1975 and 1980, so there is no justification for the standard economic dogma that wage increases trigger or drive inflation (in peacetime).
I think most people get the employment/wages/inflation correlation wrong. The fastest way to get a raise in real dollars is to get a new job. When inflation is high like it is now, then for many people staying at their current job is effectively getting a pay cut and people hate those.
The Fed cant act on the supply chain issues ie due to the discarding of containership during the pandemic. It will take at least to 2023 to go back to a balance state. But this is not bearable to inflation hawks. They want unemployment back to 5% asap while companies are raising their prices. But it is a crime to ask for higher wages.
This will not end well.
The unusual thing is that we had a major recession followed by a major recovery. We've had three recessions in the 2000s, and this is the first one to be followed by a rapid recovery. Not only has the quits to hires ratio has recovered to the trend, but it has continued to rise. There's no sign out of leveling off as before the 2000 or 2007 crash. When was the last time this happened?
I checked FRED, but they have no relevant data from before 2000 (*). I checked the BLS site, but they have no data I can find about quits, hires or separations though they have a lot of recent press releases. I doubt we had this kind of recovery after the early 90s recession. Wages didn't start rising until the late 90s. Maybe the 1980s?
(*) FRED does have quits and "accession" series running from 1919 to 1968, but they are in terms of hundreds of people. Is that population, work force, 18-54 or what? Are the two series commensurate? They sure look lumpy. Also, what happened from 1969 to 1999. Surely some people quit or were hired between those dates.