JACOB GOLDSTEIN, HOST:
I'm Jacob Goldstein, and this is THE INDICATOR, Planet Money's quick take on the numbers in the news. Today on the show, a report the government released this morning gives us a really exciting way to think about work in America, and it shows us why quitting is awesome.
(SOUNDBITE OF MUSIC)
GOLDSTEIN: This morning, I called up Nick Bunker. He works for the Washington Center for Equitable Growth, which is a think tank. And I called him to talk about this really interesting and useful but often overlooked jobs report. It's called JOLTS.
NICK BUNKER: I love JOLTS. It is a strange thing to say about a economic data release, but it's definitely something that is one of the highlights of my month, to be completely honest.
GOLDSTEIN: The latest JOLTS report came out this morning.
BUNKER: So it's 9:59, so we got a minute to go. So I'm just going to start hitting refresh, and refreshing, and refreshing and refreshing.
GOLDSTEIN: I was on the phone with Nick when it happened.
BUNKER: Come on.
(SOUNDBITE OF CLICKING)
GOLDSTEIN: Is it there yet?
BUNKER: I don't see it. It's still - oh, hey, there we go.
GOLDSTEIN: So Nick walked me through all the kind of insights that the report gives into the jobs market. The name JOLTS - it's an acronym. And the first part, the JO - that stands for job openings, as in the number of job openings in America. And Nick said it is really useful to take this number - the number of job openings - and compare it to the number of people who are unemployed. That way, you can see how many unemployed people there are for every available job. And he said you see this really clear, kind of elegant story unfold over the past decade or so.
BUNKER: So during the Great Recession, kind of at its height, you had close to seven unemployed workers per job opening.
GOLDSTEIN: Wow. OK.
Seven people lined up out the door for every job - I mean, just think of the power dynamic this creates between workers and employers.
BUNKER: Yeah, so all the bargaining power is on the employer side - and that they have all these people potentially to hire, and they can pick and choose among them.
GOLDSTEIN: Got it. Where are we right now as a - you know, according to the newest numbers?
BUNKER: Yeah, so according to the newest numbers, in November, there was roughly 1.1 unemployed workers per job openings.
GOLDSTEIN: So we've gone from, like, seven unemployed people per job opening all the way down almost to one person per opening.
BUNKER: That's a lot of gains. That's a really great sign for the labor market. When employers are competing for workers, workers are going to have more bargaining power, and that's going to lead to stronger wage growth.
GOLDSTEIN: OK, so that's the JO in JOLTS - right? - how many job openings are there? OK.
BUNKER: And then...
GOLDSTEIN: And then what's the LTS?
BUNKER: So the LT part is labor turnover.
GOLDSTEIN: What are the components of labor turnover?
BUNKER: It's quitting. It's hiring. It's getting laid off or retiring.
GOLDSTEIN: Essentially, it's everyone who is losing a job and/or getting a job. And I have to say, personally, I love this part of the report because, you know, when the other monthly jobs report comes out - the one we usually talk about, the one you hear all over the news - we'll say something like, you know, the U.S. economy added 150,000 jobs this month. And this is true on net, right? That is the net growth in the number of jobs.
But that net number hides this incredible, massive churn. It hides all this turnover that is going on in the job market - you know, people leaving old jobs, people getting new jobs. And this churn, this turnover - this is the job market in action. This is largely people finding jobs they're better suited for. It is people finding jobs that pay more. This part of the JOLTS report is so illuminating that I'm going to make it today's indicator - 5.5 million. According to this morning's JOLTS report, 5.5 million people got hired for new jobs in November, and a similar, slightly lower number left old jobs. Nick says he pays particularly close attention to one part of turnover.
BUNKER: The number I always look at whenever the reports come out is the quits rate.
GOLDSTEIN: The quits rate - the percentage of workers who quit their job in a given month.
BUNKER: If you're quitting your job, you likely either already got a new job or you think you are very likely to get a new job soon. So that's a sign that people feel confident enough to leave their current job.
GOLDSTEIN: So the higher the quits rate, the better. A lot of people quitting - that's actually a good sign about the state of the economy.
BUNKER: Yes, definitely.
GOLDSTEIN: The latest quits rate, according to today's JOLTS report, is 2.2 percent. So 2.2 percent of workers quit their jobs in November. Nick says that's a lot better than it was back during the recession. Then, it was just a little over 1 percent. But, he says, the quits rate has been stagnant for a while now, and that makes him nervous.
You would like to see more people quitting their jobs.
BUNKER: I would. I would.
GOLDSTEIN: So that's JOLTS - Job Openings and Labor Turnover.
BUNKER: Oh, sorry, and I missed the S there.
BUNKER: I missed the S.
GOLDSTEIN: Oh, yeah, what's the S?
BUNKER: And then S is survey.
GOLDSTEIN: S is for survey, yes.
BUNKER: ...In that it's - they actually have to go out and ask employers about this.
GOLDSTEIN: And is saying JOLTS survey like saying ATM machine? Are all the, like, JOLTS experts going to be like, the survey is in the S. Don't say JOLTS survey?
BUNKER: (Laughter) I think they'll forgive you.
GOLDSTEIN: I don't know, man. If you say ATM machine on a podcast...
BUNKER: Yeah, some people do get angry. Fair.
GOLDSTEIN: No one will forgive you.
(SOUNDBITE OF DROP ELECTRIC SONG, "WAKING UP TO THE FIRE")
NPR transcripts are created on a rush deadline by Verb8tm, Inc., an NPR contractor, and produced using a proprietary transcription process developed with NPR. This text may not be in its final form and may be updated or revised in the future. Accuracy and availability may vary. The authoritative record of NPR’s programming is the audio record.