The U.S. economy is still booming. Layoffs haven’t spiked. The stock market continues to climb. And yet, when a fresh batch of labor market data landed Tuesday, one of the country’s most respected economists said it made her stomach drop.
“It’s gut-wrenching,” Diane Swonk, chief economist at KPMG, told Fortune. “We’re growing, but we can’t generate jobs.”
“Rock bottom” hiring
Two releases—the November Job Openings and Labor Turnover Survey (JOLTS) from the U.S. Bureau of Labor Statistics and December’s private-payroll report from ADP—tell the same story from different vantage points. Hiring demand is cooling fast, and worker movement has frozen, yet employers are also still reluctant to cut staff. The result is a labor market stuck in a strange, late-cycle equilibrium that Swonk said looks nothing like past expansions.
Start with JOLTS, the Job Openings and Labor Turnover Survey, which, as official government data, holds more water with economists than the private ADP data. Job openings fell to about 7.1 million in November, down sharply from October and nearly 900,000 lower than a year earlier. The “quit rate,” which serves as the ultimate barometer for worker confidence and the ability to climb the career ladder, remained stagnant at 2.0% in November (Swonk said she was shocked by this number in particular). Economists haven’t seen this level of inertia since January 2014, a period when the country was still clawing its way out of the Great Recession.
