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Economy in Brief

The JOLTS report (Job Openings and Labor Turnover Survey) is not a front-line jobs report but it is a report economists like that reveals a lot about what is going on behind the scenes in the labor market. This month’s report is mixed as it shows a slowing in hires and in openings but fewer separations and a steady quit rate with lower layoff tendencies. At the bottom of the table below I try to bring theses reading to life by placing them in their respective ranges and defining each as being in a set percent of its range. There I also present the current readings expressed as percentages of their own respective means and medians. In that way the relative merit of each category comes through a bit clearer.  The table shows that layoffs and separations are quite low. Layoffs are at a series low, in fact. Quits are high. To an economist this a good sign since people do not quit jobs unless prospects are good. A high quit rate is a good sign of labor market strength. Job openings are high and higher in their range than is hiring (hiring is at the two-thirds mark in its range). This configuration makes me wonder about skill mixes and labor shortages.
JOLTS Summary Statistics for the Nation
  National Statistics Since January of 2000  
  Openings Hires Separation Quit Layoffs & D Other Separations
Feb-07 3.0 3.9 3.6 2.2 1.1 0.2
Jan-07 3.1 4.0 3.7 2.2 1.5 0.3
average 2.6 3.8 3.7 2.0 1.4 0.2
Median 2.6 3.8 3.7 2.0 1.4 0.2
Percentile 75.0% 66.7% 37.5% 83.3% 0.0% 0.0%
Range 1.2 0.9 0.8 0.6 0.7 0.1
Max 3.3 4.2 4.1 2.3 1.8 0.3
Min 2.1 3.3 3.3 1.7 1.1 0.2
Percent of
Median 117.6% 102.6% 97.3% 110.0% 78.6% 100.0%
Average 115.9% 103.4% 98.0% 108.1% 78.2% 86.8%
Recovery period only
Percentile 75.0% 66.7% 37.5% 83.3% 0.0% 0.0%
Median 115.4% 100.0% 97.3% 104.8% 78.6% 100.0%
Average 113.5% 102.2% 97.9% 107.7% 78.6% 86.4%
Regional variances

Regionally conditions can be and are quite different. Hiring has been strong in the Midwest, West and South, but it has lagged in the Northeast. Job openings are the highest in the South then the West followed by the Midwest with the Northeast decidedly trailing.But all regions see low layoffs. For three of them layoffs are at a cycle low. For the Midwest they are moderate in the lower one-third of its range. We know that a lot of auto company programs are trying to ease out high cost labor and that these firms concentrate in the Midwest.  Still, the Midwest reading is quite moderate. The relatively high quit rates show strong local labor markets from the South across the Midwest to the West. But the Northeast has a low quit rate, a sign of a poor labor market since workers with jobs are reluctant to leave them.

JOLTS by Industry

We can weight and array JOLTS data by industry. On this basis some odd things emerge as well as some very understandable ones.

The construction sector is clearly under some pressure. Yet, the JOLTS figures show that job openings in the sector are at a recovery period high.  At the same time, separations, quits and hires in the sector are at or nearly at recovery period lows. This raises some questions about what the job openings are - for what kinds of jobs and what pay. Hires are the relative strongest for Government, followed by other services. Manufacturing sector hires are above the midpoint, in their 60th percentile. Quits are moderate for government and fairly robust for manufacturing and services.

On balance the JOLTS data show a still vibrant labor market. The high quit rates are quite indicative of strength and they transcend most regions (except the NE) and industries (except construction). The service sector is a very solid sector. Even manufacturing is far short of being called soft; it looks pretty well-off despite all the industry restructuring.   In short the JOLTS report looks behind the scenes of the jobs data and finds that the underpinnings look pretty good.
JOLTS Rankings by Main Sectors
Major Job Sectors
Feb-07 Services Manufacturing Constructions Government
Job Openings 67.8% 85.7% 100.0% 87.5%
Hires 79.7% 60.0% 0.0% 100.0%
Separations 57.4% 70.0% 4.0% 50.0%
Quits 89.0% 83.3% 0.0% 50.0%
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