Beyond the Numbers: Decoding the JOLT Report’s Impact on Consumer Spending
Earlier this year, PYMNTS Intelligence found that only a minority of workers surveyed — at 20% — said that it was “very or extremely” likely that they’d switch jobs in the next year. At the same time, we noted that 83% of consumers eyed 2024 with concerns about the economy. Only 38% of consumers said they’d expected a real increase in their wages.
As 2024 moves toward the history books, there are some indications that sentiment may lift, where a more sanguine outlook about employment spurs a more upbeat outlook about other factors of life — including, perhaps, spending.
There are some indications in the latest round of jobs-related data — through what’s known as the JOLT report (short for Job Openings and Labor Turnover) — that workers are ready to make the leap, and many are already doing so, as job openings outpace hiring.
The Bureau of Labor Statistics reported Tuesday (Dec. 3) that available jobs increased, as measured in October, while hiring slowed. Wall Street may be gaming the chances of another Federal Reserve cut to interest rates this month (as the headline numbers suggest a slowing labor market).
Two data points stand out here: Workers are quitting at a relatively heady pace, which speaks a bit to the confidence, and layoffs are trending lower; the separation of workers from jobs is voluntary.
By the numbers, job openings totaled 7.74 million on the month, up 372,000 from September. Consensus forecasts had been that openings would stand at 7.5 million. Openings as a share of the labor force rose to 4.6% from 4.4%. During a month wracked with hurricanes and labor strikes, total hires of 5.3 million were down by 269,000 roles month over month. Though the October data represent boost in job openings, we’re well below last year’s level, by 11%, seen in October of last year.
Where the Jobs Are
The professional and business services sector stood out with the largest increase in job openings, adding 209,000 positions in October, while information followed with 87,000 additional openings. Leisure and hospitality also demonstrated strength, particularly in accommodation and food services, which saw a 6.7% job opening rate, the highest among all industries.
Small businesses continue to drive the labor market, accounting for 80% of October’s job openings. These establishments, however, also led in separations, laying off nearly 1.2 million employees, representing 76% of all separations. But we note that small businesses made significant progress, reducing layoffs by 56% compared to October 2023, which gives the nod to some stabilization on Main Street.
In October, 3.4 million individuals quit their jobs, bouncing from a low in September not seen in four years.
Connecting the dots, there are a few glimmers of what might lie ahead. Last week, we reported that consumer confidence ticked up in November, where the Conference Board reported that one-third of respondents said jobs were plentiful, down from the 34.1% seen in October. At the same time, the percentage of respondents saying jobs were “hard to get” fell too, to 15.2 from 17.6%.
If individuals and households are eyeing a career switch, it may be to get some additional padding in their wallets — in terms of spendable wages, which comes with higher income. PYMNTS reported in the wake of the most recent GDP report that disposable income growth has been pressured, with current-dollar disposable personal income up only 2.3%, and adjusted real growth at 0.8%.
Personal saving was $934.4 billion in the third quarter, “a downward revision in change of $34 billion from the previous estimate,” per the data from the Bureau of Economic Analysis. The personal saving rate — personal saving as a percentage of disposable personal income — was 4.3% in the third quarter, a downward revision of 0.5%.
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