Bonus episode
Episode summary
Like all fields, economics has a language all its own, and more than its fair share of acronyms. In this bonus episode, Liz explains one of those acronyms–JOLTS–that was in the news lately, what you should know about, and how it’s relevant to business owners.
Shownotes
Job Openings and Labor Turnover Survey [BLS]
Transcript
Liz Wilke (00:00:32) – Hi, I’m Liz Wilke.
Caleb Newquist (00:00:36) – And I’m Caleb Newquist.
Liz Wilke (00:00:37) – And this is the Gustonomics Podcast. In each episode, we bring you a little bit of economics knowledge so you can be more informed, use the information in your business or work, or make up for the fact that you did not know that President’s Day is really just our fancy term for Lincoln and Washington’s birthday.
Caleb Newquist (00:00:57) – Please remember to rate, review, and subscribe to the show or share it with an economics curious friend. Anything you can do to spread the word about the podcast is greatly appreciated.
Caleb Newquist (00:01:08) – So Liz, this is a little bonus episode we’re doing. It’s going to be on an economic topic, dare I say a basic topic, hence the 101 in the title. And we’re going to cover it very quickly and very succinctly. So are you game? I mean, I know we talked about this, but I want to make sure you’re game.
Liz Wilke (00:01:28) – I’m definitely game.
Caleb Newquist (00:01:29) – Great. So in this episode, we’re going to discuss JOLTS. So Liz Wilke, what is JOLTS?
Liz Wilke (00:01:40) – JOLTS, Caleb, is an acronym that stands for the Job Openings and Labor Turnover Survey.
Liz Wilke (00:01:48) – It is conducted by the Bureau of Labor Statistics and it comes out every month and it tells us how many job openings there are by employers. And it also tells us how many people were hired, how many were laid off, and how many people quit their jobs over the last month in each sector.
Caleb Newquist (00:02:05) – Okay, lovely. And why should anyone care about JOLTS?
Liz Wilke (00:02:12) – JOLTS is a lesser known sibling of the jobs report. That’s the number every month that comes out that tells us how many jobs total were gained or lost. So when you see that number in January saying that 353,000 jobs were added in January, that’s the jobs report. JOLTS tells us a little more about the dynamics going on underneath that big number, right? How many people were hired relative to how many open jobs are there still sitting out there or how many people were hired, but how many people quit or got a new job, right? It helps us to understand some of the dynamics that go on underneath that number.
Caleb Newquist (00:02:50) – Great. And what should our listeners, whether they own a business or advise one or work for one, what should they take away from the most recent JOLTS report that just came out a week ago?
Liz Wilke (00:03:06) – The takeaway actually isn’t really from the JOLTS report itself as much as it’s from the combination of the JOLTS and the Consumer Price Index report, the CPI. For those of you who have been listening for a while, you might remember that we did an episode on the Consumer Price Index a while back. Be great to take a new listen if you’re interested, but the CPI report basically measures the price of things. The basic thing from the JOLTS report is that job openings are stable. They’re pretty much drifting sideways.
Liz Wilke (00:03:36) – Some places are up, some places are down, and total quits and layoffs are also basically stable across the board. So that very modest result, coupled with the fact that the recent inflation numbers came out and indicated that the 12-month increase in prices across the board was about 3.1%, which is definitely too high for the Fed, who wants to see it coming down to 2%. In fact, it’s actually a little higher than it was last month.
Liz Wilke (00:04:04) – Those two things combined tell us that the Fed can be pretty confident about leaving the interest rate where it is for longer in the hopes of making some more inflation progress. So the possibility for a late-year cut is getting stronger, and the possibility for a mid-year cut is getting a little weaker off of that report.
Liz Wilke (00:04:22) – What that really means for businesses is that businesses that are funded by equity investors are going to have to think about extending their runways somehow, and businesses wanting to take out loans for investment are probably going to sit on the sidelines a bit more, which is going to reduce investment overall, generally. But it also means for consumers and households that if you are earning 5% on your savings account right now, you can expect that that might go on a little bit longer.
Caleb Newquist (00:04:51) – Boom. Done. That’s it for this bonus Gustonomics 101 episode. I hope you learned something new and useful for yourself or your business. Please let us know what you think of the podcast by leaving a review, or share it with a friend or colleague who might enjoy it. I’m Caleb Newquist.
Liz Wilke (00:05:05) – And I’m Liz Wilke. Thanks for listening.
