Unemployment, Wages and Quits: Slack Labor Market

The headlines will go to the rising unemployment, but there's other interesting labor market news.

Not a surprise, but the number of workers voluntarily quitting is down.  Folks are sticking with the devil they know (or at least the boss they know).

The slack labor market is reflected in modest wage gains:

Business Planning Implications:  If you need talent, this is a good time to pick it up.  Don't dawdle.  Labor markets will tighten up next year.

Don't forget that we'll soon be entering the era of very slow gains in the labor force.  The current slackness should not lead to poor employee retention behavior.

Comments

[Steve - Technical Analyst]

Hello Bill,

I'm curious how you came predict the labor markets will become tighter next year. I wouldn't call myself an economist, so this intrigues me as I see increases in unemployment and a struggling economy making it easier to find labor.

Great article. Thanks

[Bill Conerly]

Steve, good question. I'm forecasting a turnaround. Markets are certainly slack now, but they always turn around. Sometime next year, maybe around mid-year, we'll see the change.

[Laurence Hunt]

Bill,

Does the birth-death model enter into these figures? I understand from your neighbour Bill Fleckenstein that when the model finally assumes a recession, it will start to subtract rather than add jobs. I also note that Paul Kasriel on Safehaven.com is tracking broader measures of unemployment which push the numbers above 10%, and make the 2003 recovery look very weak. In short, will the ugly numbers turn much uglier when the birth-death model reverses direction?

My reason for these kinds of comments if my sense that we're now moving into a recession that is fundamentally different than 2000 and 1990. If I'm wrong, it will be because China gets so strong that they start buying US exports - maybe!?!