The unemployment report on Friday is a mixed bag for workers. Unemployment went up which is bad and wage growth, at 8 cents per hour, was only so – so. The numbers of jobs created was not as high as last month, but still healthy at 311,0000.
But I always look at what I call the “Take that Job And Shove it Number,” the numbers that tell me whether workers are feeling confident enough about their own power and leaving a job to find another better job. Those indicators of worker power are down.
Earlier this week, the Labor Department reported that quits fell from 3.9 million in January 2023 from over from over 4.1 million in December. And the overall quits rate is 2.5%. But the difference in worker quitting behavior by industry is telling. Quits fell in professional and business services, and education, and in the federal government by much more than average. I am not surprised the layoffs at Google
In Friday’s report we have another indicator of quits similar to the Department of Labor numbers earlier this week. We saw the share of the unemployed who were voluntary job-leavers (in other words they quit)was 14.8% in February which is way down from the September rate of 15.8% and down from last month’s rate of 15.3%.
Consistent with the job-leaver rate slowing a bit is that the job-loser share is creeping up from a lowish number of 44.9% in July 2022 to 45.8 % for February 2023.
Quiet Quitting Is Nonsense
By the way, the productivity report didn’t get enough attention this week. It shows the nonsense about quiet quitting is just that, nonsense. Workers are not sticking it to their employers and “leaving” without leaving. We still don’t see any indication of so-called “quiet quitting” since productivity is rising and real hourly compensation, which takes into account inflation erodes buying power, decreased 2.8 percent in 2022. This is the largest annual decline in real hourly compensation since the series began in 1948. Can I repeat that. Wage growth adjusted for inflation is the lowest in over 60 years.
Memo to the Federal Reserve
What does this report say to Federal Reserve economists? Engineering a recession in order to discipline workers is a policy connected to fanciful economic models wrongly concluding workers cause inflation by pushing up wages and prices. Fed economists, take your nose out of the dusty textbooks and look at reality. Price hikes are not passive responses to wage pressure. Instead companies are making active choices to raise prices to feed profits.
Quits are slowing down, layoffs are up, the labor market is not hot.