We've contended all year that the labor market was normalizing from the unsustainable pace of hiring during the pandemic. We disagreed with the view that it was weakening. Now we are turning more upbeat about the outlook for employment. Our bet is that the animal spirits unleased by Trump 2.0 will soon be reflected in more job openings and a faster pace of hiring. Today's JOLTS report about labor market conditions was for October, just before Election Day. The results were mixed but encouraging on balance:
(1) October's job openings rose 372,000 to 7.74 million (chart). While hires fell by 269,000, layoffs decreased 169,000 and quits increased by 228,000. Bad weather, labor strikes, and uncertainty regarding the US elections probably depressed hiring in October. Still, the labor market's broad resilience in the face of those pressures is significant. More workers quitting their jobs suggests they are confident about their ability to earn higher wages elsewhere. The animal spirits unleashed by Trump 2.0 should boost hiring during the final three months of this year and well into next year, in our opinion.
