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Economy in Brief

U.S. JOLTS: Job Openings Rate Returns to Record High; Hiring Stabilizes
by Tom Moeller  August 8, 2017

The Bureau of Labor Statistics reported that the total job openings rate rose to 4.0% during June from 3.8% in May, revised from 3.7%. It was the highest level since last July, equaling the record. Despite the increase, the hiring rate held steady at 3.7%, its highest level since last August. These figures are from the Job Openings & Labor Turnover Survey (JOLTS) and date back to December 2000.

Increases in job openings were broad-based. The private-sector job openings rate recovered to 4.0%, also its highest level since July. The job openings rate in professional & business services surged to 5.5%, up from February's low of 4.5%. The leisure & hospitality openings rate notched up to 4.9% and remained near the record high. The education & health services rate jumped to 5.0% while approaching the record high. The trade, transportation & utilities rate also surged to 3.7%, but retail trade eased to 3.8% from the record high of 4.0%. The construction sector job openings rate surged to 3.2% from 2.0% in January. The factory sector job openings rate rose to 3.0%, but still was down from the record high of 3.2% in March. The government sector rate rose to 2.5% the highest level since November. That was up from 1.6% in 2011. 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 recovered to a record 6.163 million. Private-sector job openings rose 8.1% (12.0% y/y) led by a more-than one third jump (31.6% y/y) in the construction sector which reversed May's decline. Leisure & hospitality openings rose 2.6% (11.3% y/y) and education & health services openings surged 10.2% (10.8% y/y). Factory sector openings recovered 10.9% (6.9% y/y) following two months of decline, while professional & business services openings surged 17.4% (16.4% y/y). Retail trade openings declined 6.3% (+4.0% y/y). Job openings in the public sector improved 8.3% (5.7% y/y).

Stability in the overall hires rate at 3.7% reflected zero change in the private sector rate at 4.1%. That was the highest level since January. The hiring rate in professional & business services dipped to 5.6%, a six month high. The hiring rate in leisure & hospitality improved to 6.1%, but the hires rate in the education & health services sector declined to 2.7%. The construction sector hiring rate eased to 5.0%, and the trade, transportation & utilities rate held at 3.9%. The manufacturing hires rate eased to 2.6%. The government sector hiring rate held steady at 1.5%, down from 1.7% nine months earlier.

The number of private-sector hires eased 2.0% (4.3% y/y) to 5.026 million following a sharp May increase. Hiring in education & health services declined 5.4% (-3.2% y/y) and reversed most of the prior month's increase. Professional & business service sector hiring fell 1.2% (+14.6% y/y). Hiring in trade, transportation & utilities gained 1.3% (2.2% y/y) and added to May's rise. Factory sector hiring declined 2.1% (+1 5.0% y/y), but the number of leisure & hospitality jobs improved 2.4% (-4.3% y/y). Construction sector hiring fell back 5.4% (+25.2% y/y) and government sector employment eased 0.3% (-7.3% y/y).

The total job separations rate held steady at 3.6%. The leisure & hospitality separations rate held at 5.9%, where it's been for three months. It remained well below the 2016 peak of 6.4%. The construction sector's separations rate ticked up to 5.1%. The professional and business services rate rose to 5.5%, up from February's 4.9% low. In trade, transportation & utilities, the separations rate rose to 3.9%. The information sector's rate fell to 2.6%, a seven month low. The factory sector separations rate held steady at 2.6% for the third month, while the separations rate eased to 2.3% in the financial sector from the 2.5% May high. The separations rate in the government sector declined to 1.4%, equaling the lowest level since May 2015. Separations include quits, layoffs, discharges, and other separations as well as retirements.

The layoff and discharge rate jumped to 1.2%, the highest level since May of last year. That was higher than the 1.0% low nine months earlier. The private-sector rate held steady at 1.3% but remained below the 2015 high of 1.5%. The government sector rate was steady at the recent low of 0.4%. Total layoffs increased 5.7% y/y. Private-sector layoffs increased 5.8% y/y, while government layoffs rose 2.3% y/y.

Large numbers of hires and separations occur every month throughout the business cycle. Net employment change results from the relationship between hires and separations. When the number of hires exceeds the number of separations, employment rises, even if the hires level is steady or declining. Conversely, when the number of hires is less than the number of separations, employment declines, even if the hires level is steady or rising. These totals include workers who may have been hired and separated more than once during the year.

The JOLTS survey dates to December 2000 and the figures are available in Haver's USECON database.

JOLTS (Job Openings & Labor Turnover Survey, SA) Jun May Apr Jun '16 2016 2015 2014
Job Openings, Total
 Rate (%) 4.0 3.8 3.9 3.7 3.7 3.6 3.3
 Total (000s) 6,163 5,702 5,967 11.3% 3.1% 12.1% 28.1%
Hires, Total
 Rate (%) 3.7 3.7 3.5 3.6 43.6 43.5 42.4
 Total (000s) 5,356 5,459 5,043 6.2% 1.2% 5.8% 8.2%
Layoffs & Discharges, Total
 Rate (%) 1.2 1.1 1.1 1.1 13.7 14.8 14.7
 Total (000s) 1,701 1,673 1,605 5.7 -4.8 2.8% 2.3%
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