Labor Market Turnover Signal

Signal Summary:

• Configuration statement: Given a Quits Rate of 1.9, a Layoff Rate of 1.1, and a Z-score of -0.72, this setup aligns with Downward-biased price paths and Indeterminate volatility, where the dominant risk is Regime shift, not mean reversion (1).
• The signal is currently in a persistent Bearish regime, reflecting a loosening labor market (1).
• Conviction Band: Low; Interpretation Confidence: Low Confidence; Internal Conflict Flag: No. Signal Stability Assessment: Stable; Threshold Proximity: Near; Revision Sensitivity: High.

Methodology Applied:

• A Bearish regime is triggered when the Turnover Differential is below -0.20 or the Robust Z-Score is below -0.50 (1).
• Falling values in the turnover spread imply an economic slowdown and rising recession risk (1).
• Labour Market Turnover Signal: Latest observation dated 2026-04-01 (1).

Key Dynamics:

• The primary driver is the Quits Rate (1.9) failing to offset the Layoff Rate (1.1), maintaining a Z-score of -0.72 (1).
• The signal has remained in the Bearish regime for three consecutive months, suggesting persistent labor market cooling (1).
• Conditional Invalidation: A rise in the Robust Z-Score above -0.50 would shift the signal to Neutral (1).

Scenario Balance:

• Dominant base case: Continued labor market loosening as layoffs remain elevated relative to quits.
• Most plausible upside risk: A sudden rebound in worker confidence leading to a Quits Rate recovery.
• Most plausible downside risk: Acceleration in the Layoff Rate, deepening the Bearish Z-score.

Time Horizon & Aggregation:

• Time Horizon: Cyclical (months) as methodology prioritizes multi-month trends (1).
• Aggregation Weight Hint: Medium as a slow-moving confirmation signal within the labor pillar (1).

Macro Relevance:

• This signal informs the labor demand and worker confidence dimension of the macro environment (1).
• Economic mechanism: Lower quits relative to layoffs suggest reduced labor mobility and weakening employer appetite (1).
• Cycle position: Not determined.

Regime Context:

• The Bearish regime is persistent, having been active for 11 of the last 12 months (1).
• Direction of change: Stabilising within the Bearish range.

Model Limitations:

• Subject to a one-month reporting lag and prone to material annual BLS revisions (1).

Data & References:

• Labor Market Turnover Signal (2026-04-01) (1).
• Dominant factors: Quits Rate (JTSQUR) and Layoffs & Discharges Rate (JTSLDR) (1).
• Additional validation would require Job Openings (JTSJOL) and Unemployment (UNEMPLOY) data (1).