JOLTS Report: 2023 Was the Third-Best Year in the U.S. Labor Market
JOLTS Report: 2023 Was the Third-Best Year in the U.S. Labor Market
2023 was a strong year in the labor market according to most key indicators, but also the year with one of the largest labor market contractions on record.
Key takeaways from today’s JOLTS report
The labor market held steady in December, with most indicators changing little, according to today’s Job Opening and Labor Turnover Survey (JOLTS) report. As of the last day of the month, there were 9.026 million job openings. During the month, 5.621 million people were hired (or 3.6% of the workforce), 3.392 million (or 2.2%) quit their jobs, and 1.616 million (or 1.0%) were laid off or fired.
The hires rate, while a slight improvement over the prior month, remained well below its 2019 average of 3.9%, and the quits rate was also below its pre-pandemic 2.3%. At the same time, job openings remained historically high, and the layoff rate remained well below its 2016-2019 average of 1.2%.
Rounding out the year, today’s data release allows us to assess how the labor market performed in 2023 overall. According to most indicators, 2023 was the third-best year for workers on record, but also a year with one of the largest losses of worker leverage.
Five facts about the labor market in 2023
Job openings: 2023 was the third-best year on record when it comes to the average job openings rate, but also the year with the third-largest year-over-year drop in job openings through December, after 2008 and 2001—both years in which the economy was in a recession.
Quits: 2023 was the third-best year on record when it comes to the average quits rate, but also the year with the second-largest decline, after 2008.
Layoffs and discharges: 2023 was the third-best year on record when it comes to the average layoff rate (just 1.0%, well below the 1.2% average in 2016-2019), but also the year with the second-largest increase in the number of layoffs, after 2020.
Hires: 2023 was a fairly mediocre year as far as the average hiring rate goes, ranking 11th out of the 23 years on record. It saw the second-largest hiring rate decline over the course of the year, after 2008.
The labor leverage ratio: 2023 was the third-best year on record when it comes to the labor leverage ratio (that is, the ratio between employee-initiated quits and employer-initiated terminations), after 2022 and 2021. But it saw the third-largest loss in worker leverage after 2008 and 2020.
Overall, the report paints a picture of a labor market that was historically favorable to workers in 2023, but in which workers felt the ground moving under their feet. Workers evaluating the 2023 labor market on its own terms can find much to celebrate, but those comparing their labor market fortunes to those of the prior two years likely experienced disappointment.
Going forward, if JOLTS indicators hold steady at current levels, 2024 will be a stable, low-churn year. But if they continue to deteriorate as they did over the course of 2023, there is a clear risk of over-cooling.
Take a tour of the report through ZipRecruiter visualizations HERE.
