JOLTS Are Looking Good

Jolts are not an external shock to the economy. Rather, Jolt is an an acronym for job openings and labor turnover and is prominent on Chairman Yellen’s labor market dashboard. That’s good because Jolts are looking good.

The first Friday of the month employment changes are net numbers which obscure much of the dynamics of the labor market that show up in gross numbers. A modest net change in employment may obscure very large increases and declines in employment and give the false impression that nothing much is going on.

The Bureau of Labor Statistics released the report on the JOLTS survey for June yesterday and it was very positive:

“Large numbers of hires and separations occur every month throughout the business cycle. Net employment change results from the relationship between hires and separations. When the number of hires exceeds the number of separations, employment rises, even if the hires level is steady or declining. Conversely, when the number of hires is less than the number of separations, employment declines, even if the hires level is steady or rising. Over the 12 months ending in June 2014, hires totaled 55.7 million and separations totaled 53.3 million, yielding a net employment gain of 2.4 million.”

2.4 million net new jobs sounds relatively small until you realize the massive number of hires and separations they represent. The churn is definitely with us.

Separations can be voluntary (quits) or involuntary (layoffs and discharges). The quit rate has been rising relative to total separations, which is considered positive because it supposedly reflects new jobs or optimism that the quitter can find a new job. In other words, it supposedly reflects a more positive view of the labor market. Nevertheless, the expansion of job growth reflects more new hires rather than fewer separations. The new hires, in turn, reflect an increase in job openings.

The churn, reflected in the JOLTS survey, keeps the economy reinvigorated by allowing it to constantly reinvent itself.

Comments (2)

Trackback URL | Comments RSS Feed

  1. Jay says:

    You should take part in a contest for one of the greatest sites on the internet.

    I will recommend this website!

    For a wonderful answer please visit this blog youtube downloader for android freeware

  2. Isabelle says:

    I rarely comment, but i did some searching and wound up here JOLTS Are Looking Good | Bob
    McTeer’s Economic Policy Blog | And
    I do have 2 questions for you if it’s allright. Could it be
    only me or does it appear like some of the remarks
    look like coming from brain dead individuals?
    :-P And, if you are writing on additional online sites, I
    would like to keep up with everything new you have to post.
    Would you make a list of the complete urls of all your community sites like your Facebook page,
    twitter feed, or linkedin profile?

    Feel free to visit my blog post: Used Cars for sale in Austin;,

Leave a Reply

If you want a picture to show with your comment, go get a Gravatar.