– by a New Deal Democrat
The message from yesterday’s December JOLTS report and last week’s jobless claims today is that the labor market remains the strongest sector of the economy, with plenty of job vacancies and almost no layoffs.
Initial jobless claims last week fell -3,000 to 183,000 and the 4-week moving average fell -5,750 to 191,750. Both are near their multi-decade lows since last March. Continuing claims also fell by -11,000 to 1,655,000:
There is no danger of a signal of an impending recession as long as claims remain lower year-over-year, as has been the case for the past few weeks:
One caveat: There was relatively little seasonal hiring in November and December for the holidays, so fewer layoffs in January make sense. This is probably the last week for this comparison.
Meanwhile, yesterday most of the indicators in the JOLTS report for December were positive, with job openings and hiring up, with very little drop in quits:
Layoffs and layoffs rose to their highest level since March 2021 except for one month:
Overall, the JOLTS report showed a moderate but still positive labor market, and the weekly jobless claims report showed that very few people were still being laid off.
In tomorrow’s January jobs report, I’ll be looking for signs of weakening manufacturing and construction employment in these leading sectors, as well as whether short-term unemployment has risen in any meaningful way and whether the trend of slowing earnings has continued.