The job market in eight charts
Payroll growth has slowed to about 84,000 a month. Underneath the headline, hiring has narrowed to three sectors and the quit rate has fallen to a level last seen a decade ago.
- Three-month average payroll growth: about 84,000, down from 178,000 a year ago
- Health care, government and leisure account for roughly 80% of net job gains
- The quit rate has fallen to 1.9%, its lowest in a decade
The labor market is not falling apart and it is not fine. It is narrowing, which is a different thing and harder to summarize. Here is what the data shows.
Start with the headline. Three-month average payroll growth is running at about 84,000 a month, against 178,000 a year ago. That is a substantial slowdown from a level that was itself considered a normalization.
Where the jobs are
The composition matters more than the total. Health care, government and leisure and hospitality together account for roughly 80 percent of net job gains over the past six months. Outside those three, net hiring is close to zero, and in professional services, information and temporary help it is negative.
Temporary help is the one economists watch most closely, because firms cut temps before they cut permanent staff. It has now declined for eleven consecutive months.
The unemployment rate is telling you about people who lost jobs. The quit rate is telling you about people who are afraid to leave one. Right now those two numbers disagree.— A labor economist who reviewed the series
The quit rate
The share of workers voluntarily leaving their jobs each month has fallen to 1.9 percent, the lowest in a decade. A low quit rate is not itself bad news, but it is how a labor market usually looks when workers believe the next job would be harder to find than the last one.
Wage growth reflects it. Pay gains for job switchers, which for three years exceeded gains for those who stayed, are now roughly equal — removing the financial reward that drove much of the churn.
- Payroll growth: about 84,000 a month on a three-month average
- Concentration: health care, government and leisure ≈ 80% of net gains
- Temporary help: down for eleven consecutive months
- Quit rate: 1.9%, lowest in a decade; switcher wage premium now near zero
Two things would change this reading. A pickup in temporary help would suggest firms are preparing to hire again. A rise in the quit rate without a rise in layoffs would suggest workers have regained confidence. Neither has happened yet, and both usually turn before the headline number does.
Clearly written, and the section on the numbers is more careful than most coverage of this.
I had not thought about it from this angle. It shifted my view a little.
Hope there is a follow-up. These stories tend to drop out of view after a few weeks.
Hope there is a follow-up. These stories tend to drop out of view after a few weeks.