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Economy in Brief

JOLTS: U.S. Job Openings Fell Further in August
by Tom Moeller October 7, 2008

The Bureau of Labor Statistics indicated in its Job Openings & Labor Turnover Survey (JOLTS) report for August that the number of job openings fell 6.1% (-21.2% y/y) from July. The drop followed a 0.1% downtick during July and since the peak in January of 2007 the number of job openings have fallen 23.9%.

The job openings rate also fell. The August rate was down to 2.3% versus an upwardly revised 2.5% in July. 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 construction sector dropped 7.4% (-39.6% y/y) but the number of job openings in the manufacturing sector rose 10.0% (-22.2% y/y). Professional & business services job openings fell by roughly one quarter m/m (-21.6% y/y) while openings in the education & health sectors dropped 5.7% (-7.4% y/y) after two months of increase. Openings in retail trade rose 2.9% (-5.6% y/y).

By region, openings in the West fell by nearly one-third from the year ago level while openings in the Northeast fell by 15.6% y/y. They were down by 23.9% y/y in the South and off 12.2% y/y in the Midwest.

The hires rate ticked up to 3.0% from a downwardly revised July rate of 2.9%. The latest remained near the low for this cycle and it was the lowest since early-2003.The hires rate is the number of hires during the month divided by employment.The actual number of hires rose 1.1% (-15.1% y/y) after a revised 9.3% July drop. Hires in the construction sector reversed all of their July plop with a 37.2% jump. In the factory sector hires rose 2.8% (-26.9% y/y) and in the professional & business services sector they fell 3.9% (-7.3% y/y). In the leisure and hospitality sector hires reversed most of the prior month's gain and fell 4.5% (-15.1% y/y.

The job separations rate remained stable m/m at 3.2%, near the lowest since 2003. 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.

Fed Chairman Ben S. Bernanke's speech titled Current Economic and Financial Conditions to the National Association for Business Economics can be found here.

JOLTS (Job Openings & Labor  Turnover Survey) August July August '07 2007 2006 2005
Job Openings, Total              
  Rate (%) 2.3  2.5 2.9 2.8 3.0 2.8
  Total (000s) 3,278 3,492 4,162 3,974 4,272 3,863
Hires, Total            
  Rate (%) 3.0 2.9 3.5 41.9 43.4 43.1
  Total (000s) 4,070 4,026 4,796 57,771 59,153 57,501
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