The Upjohn Institute New Hires Quality Index set a record high in June, rising 0.2 percent from May to $20.14. Hiring volume dropped for the third straight month, however, and is down 4.3 percent over the year. Hiring rates are now 1.9 percent below their pre-COVID level.
In this month’s news release, Index creator Brad Hershbein looks at the difference in hiring activity for workers switching jobs and those newly hired out of nonemployment. Workers quit jobs to take new ones when their position in the labor market is strong, a concept underlying economic indicators such as the new Labor Leverage Ratio. If earnings power for people switching jobs drops, that could signal a cooling market.
Indeed, the wage index for job switchers has fallen over the past several months, while the index for those employed out of nonemployment has risen. Hiring rates for job switchers are up 3.8 percent, though, but down 2.8 percent for workers coming out of nonemployment.
The job switchers’ share of the total earning power of all new hires is still above its prepandemic level, although that share has dropped from its November 2022 peak. That suggests a labor market that still has some heat, Hershbein writes, but is starting to cool.