US vs. Idaho involuntary terminations

This month’s update on Idaho’s labor force from the U.S. Bureau of Labor Statistics (BLS) State Job Openings and Labor Turnover Survey (JOLTS), released on Aug. 17, contained an interesting nugget about the trend of involuntary terminations in the state through the end of June: they’ve been going up ever since March, having risen 14.3%.

Overall, Idaho’s rate of job openings contracted slightly in June while the level of quits and hires stayed at the same rate levels seen over the last few months.

US vs. Idaho involuntary terminations

Idaho Business Review dove into the involuntary termination data mainly because national business news has been featuring a seemingly increasing number of layoff reports from around the country for the last two months.

What we found surprised us. First, after all those layoff reports in the nation, business press is either cherry-picking certain corporate high-fliers or they are canary deaths presaging a wave of layoffs that’s just getting started but isn’t big enough — and may never become big enough — to jostle the national-level statistics.

For example, on the day this article was written, business news media giant Bloomberg proclaimed: “If your organization isn’t letting people go, the one next door probably is.” That is based on a survey of 700 big corporation executives. When we plotted the national trend of involuntary terminations, we were a bit underwhelmed by the dead-steady seasonally-adjusted national termination rate, which hasn’t budged since the beginning of the year. The seasonally-adjusted data is corrected statistically by the BLS for the seasonal effects of winter-holiday and summer-season hiring that occurs every year.

In comparison, we anticipated that Idaho jobs would be more secure and insulated, given how Idaho has recovered from the pandemic economic downturn. We were surprised to see terminations on a steady increase since March for both the seasonally-adjusted and raw data for the state. Whether this is a true trend for the seasonally-adjusted data may need to wait to be seen based on what the July data will do, and that data won’t be out until next month.

Strong labor market ≠ recession?

Regardless, economics pundits are still disagreeing on whether there is a recession in the making, and even what a recession is defined as in terms of economic metrics. The Idaho Department of Labor (DOL) and the BLS have made data-backed cases for a tight job market.

Despite the increase in terminations in Idaho, the number of jobs lost is small compared with the total labor force in the state, and more people are working in Idaho compared to recent months. According to DOL data released on Aug. 19, more people are working in Idaho in July compared with June and the beginning of the year. The workforce participation rate was 61.8% in January, 62.5% in June and 62.6% in July.

Though the Federal Reserve is in a rate increase frenzy due to inflation, which has caused a “yield curve,” (the curve of interest rates versus the maturity term of loans) to invert, the job market in the state and in the nation is beyond robust for workers because it’s tight everywhere. The national unemployment rate for July was 3.5%, which is 0.1% less than June, according to BLS. The inverted yield curve is considered a classic indicator that recession is on its way, but the robust job market everywhere is a strong metric to the contrary. The economy is slowing, but there are more jobs right now than there are applicants, which isn’t considered a sign of a weak economy.