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Economy in Brief

JOLTS: Job Openings Unchanged, Hires Rate Improved (Slightly)
by Tom Moeller September 12, 2007

The Bureau of Labor Statistics reported in the Job Openings & Labor Turnover Survey (JOLTS) that the July job openings rate was unchanged from the prior month at 3.0%. Nevertheless, it still was the highest level since January. The job openings rate is the number of job openings on the last business day of the month as a percent of total employment plus job openings.

The actual number of job openings fell 1.3% m/m to 4.225 million (+8.6% y/y). Private sector openings fell 1.6% m/m (+10.1% y/y) as widespread declines were registered in the professional & business services (-1.6% m/m), retail trade (-1.2% m/m) and transportation & utilities (-2.4% m/m) industries. Notably (job openings in the construction industry rose 22.3% m/m.

The hires rate improved slightly m/m to 3.5% and made up a bit of the prior month's decline. The recent peak for this series was one year earlier at 3.8%. The hires rate is the number of hires during the month divided by employment.

The actual number of hires rose 1.6% (-6.3% y/y) to 4.816 million. Retail sector jobs rose by 2.0% (-19.6% y/y) making only a small piece of June's 15.4% drop. Hires in the construction industry rose by 14.8% (9.0% y/y) and factory sector jobs were about unchanged m/m (-5.6% y/y).

The job separations rate in July fell slightly m/m to 3.2%. Separations include quits, layoffs, discharges, and other separations as well as retirements. The total separations, or turnover, rate is the total number of separations during the month divided by employment. The level of job separations fell a harder 1.4% (-3.5% y/y) from June.

The JOLTS survey dates only to December 2000 but has since followed the movement in nonfarm payrolls, though the actual correlation between the two series is low.

A description of the Jolts survey and the latest release from the U.S. Department of Labor is available here.

Yesterday's speech by Federal Reserve Board Chairman Ben S. Bernanke, Global Imbalances: Recent Developments and Prospects, can be found here.

JOLTS (Job Openings & Labor  Turnover Survey) July June July '06 2006 2005 2004
Job Openings Rate: Total 3.0% 3.0% 2.8% 3.1% 2.8% 2.5%
Hires Rate: Total 3.5% 3.4% 3.8% 43.6% 43.1% 41.7%
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