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The job market shows signs of cooling as workers become more hesitant to switch employers, according to the latest Bureau of Labor Statistics report released Wednesday. The quits rate decreased to 1.9% in August from 2% in July— the lowest level since June 2020. Additionally, the Job Openings and Labor Turnover Survey (JOLTS) revealed a decline in hiring, with 5.31 million new hires in August compared to 5.41 million in July.
Kimberly Forrest, Founder and Chief Investment Officer of Bokeh Capital Partners, joins Catalysts to analyze these findings.
Forrest characterizes JOLTS data as "aspirational for companies," explaining that many job openings remain unfilled due to mismatches between applicant qualifications and employer requirements. "I always look at JOLTS as company wishlists about finding the perfect employee. They want to find them, but when they're putting that ad out there, they know there's a good chance they're not going to hire," she explains.
Kimberly, based on the jolts data this morning, it sounds like a lot of these companies are also hiring, which is not the sentiment that is out there right now, uh, over 8 million openings, an increase of over 300,000 jobs. But then you look at the quits rate and it's maybe a different picture. I guess I will I will let you explain it because you're the expert here, but what do you make of that that jobs number and why is that not potentially a lift for the equities market?
Sure. Well, a couple of reasons. What we've learned by watching jolts so carefully during the 20 I guess these are the 2020s. Um is that jolts is kind of aspirational for companies. You know, whenever we had at uh two and a half jobs per job seeker, a lot of those jobs went unfilled because well, there were people that didn't have the qualifications. So I always look at jolts as these are company's wish lists about finding the perfect employee. They want to find them, but they're they know that when they're putting that ad out there, there's a good chance they're not going to hire. So that's the way I look at this jolts data. Now, that being said, it is very promising that it's turned around. Pretty much all year, jolts has been reducing its total number. And um as you say, the uh amount of people quitting to either not work or to go to another job is lower. So I think um job seekers which if you're employed, you're a job seeker, um they're getting much more cautious about where they're going and they're not going to take a chance let's say on a startup in my old world of software engineering, they're going to want a more practical, you know, steady Eddie kind of job. And I think the risk that's out there in the world, not just in the markets, but out there in the world lens people to make less risky decisions.
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Nevertheless, Forrest views the declining numbers as "promising," suggesting a potential shift in the labor market dynamics.
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This post was written by Angel Smith