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Economy in Brief

JOLTS: May Job Openings Up Minimally - Hires Plunged
by Tom Moeller July 9, 2008

The Bureau of Labor Statistics reported in the Job Openings & Labor Turnover Survey (JOLTS) that for May, the number of job openings rose 0.4% from April. The rise followed April's 1.6% drop after declines during most of the prior twelve months. Since their peak in January of 2007, the number of job openings have fallen 14%.

In addition, the job openings rate during May was unchanged m/m at 2.6%. The latest figures are down from near 3% one year ago. 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 in the manufacturing sector fell 3.3% (-31.0% y/y) in May and professional & business services job openings fell 11.1% (-11.2% y/y). Job openings in the education & health sectors also fell but by a more moderate 1.8% (-3.9% y/y) and job openings in retail trade surged 13.3% (7.9% y/y).

By region, openings in the South were weakest, off 19.2% y/y. In the Midwest openings fell a lesser 5.6% and they were off 8.0% y/y in the West. In the Northeast job openings also fell 8.0% y/y .

The hires rate plunged to 3.1% from 3.4% in April.The hires rate is the number of hires during the month divided by employment.The latest figure was the lowest since 2003. The actual number of hires plunged 8.8% (-11.8% y/y) and that was the sharpest m/m decline in the series' short record which extends back to 2001. Hires in the trade & transportation sectors fell 11.5% (-20.5% y/y) and construction sector hiring plunged 22.1% (-15.5% y/y).

The job separations rate held stable m/m at 3.2%, down from 3.7% at the peak. Separations include quits, layoffs, discharges, and other separations as well as retirements. The level of job separations fell 3.5% y/y.

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.

Bank Lending , Financing Constraints and SME Investment is a working paper from the Federal Reserve Bank of Chicago and it can be found here.

JOLTS (Job Openings & Labor  Turnover Survey) May April May '07 2007 2006 2005
Job Openings, Total              
  Rate (%) 2.6 2.6 2.9 2.8 3.0 2.8
  Total (000s) 3,626 3,612 4,133 3,974 4,272 3,863
Hires, Total            
  Rate (%) 3.1 3.4 3.5 41.9 43.4 43.1
  Total (000s) 4,301 4,715 4,875 57,771 59,153 57,501
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