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Economy in Brief

U.S. JOLTS: Job Openings Rate & Level Hold Steady; Hiring Declines
by Tom Moeller  November 7, 2017

The Bureau of Labor Statistics reported that the total job openings rate in September remained at the record high of 4.0%, where it's been for four straight months. The hiring rate declined, however, to 3.6%, the lowest level since March. These figures are from the Job Openings & Labor Turnover Survey (JOLTS) and date back to December 2000.

The private-sector job openings rate remained at 4.3% while August's level was revised down from 4.4%. The professional and business services openings rate strengthened to 5.4%, though it remained well below its 6.1% high in March of last year. The education & health services rate held steady at 4.8%, up y/y from 4.6%.The job openings rate in the leisure & hospitality sector eased to 4.6% from a strong 5.1%, which was just below the 2001 high. The trade, transportation & utilities rate slipped to a still-high 3.8% as retail trade eased to 3.7%, down from May's record of 4.0%.  The construction sector job openings rate surged to 3.5%, the highest level since February 2007 and up from 1.3% in November 2015. The factory sector job openings rate eased to 3.3% from August's record high of 3.4%. The construction sector job openings rate fell to 2.8%, its lowest level since May. The government sector rate notched up to 2.3%, but remained down from June's seven-year high of 2.5%. 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 held steady m/m at 6.093 million, still near the record high. It remained up 7.5% y/y. Private-sector job openings slipped 0.4% (+8.4% y/y) to 5.563 million, just below July's record of 5.625 million. Construction sector job openings declined 14.8% (-17.3% y/y) while factory sector openings were off 2.3% (+30.4% y/y). Leisure & hospitality sector realized 11.9% fewer (+4.6% y/y) openings. Trade, transportation and utilities job openings backpedaled 2.9% (+7.9% y/y), including a 4.2% decline (-2.7% y/y) in the retail sector. Education & health services openings fell 1.6% (+7.9% y/y). To the upside, professional & business services job openings strengthened 15.0% (6.0% y/y). Job postings in the public sector gained 4.7% (-0.6% y/y).

The dip in the overall hires rate reflected a decline in the private sector rate to 4.0%, the lowest level since April. The hiring rate in leisure & hospitality slipped m/m to 6.0%, down versus the 7.0% high in December 2015. The hiring rate in the education & health services sector eased to 2.8%. The trade, transportation & utilities rate slipped to 3.7% and remained in this year's declining trend. The manufacturing hires rate fell to 2.7%, but nevertheless remained near its ten-year high. Working higher was the construction sector hiring rate which improved to 5.5%, an eight-month high. The hiring rate in professional & business services was steady at 5.4%. The government sector hiring rate ticked up m/m to 1.6%, the same as one year ago.

The total number of hires, at 5.273 million, declined 2.7% (+1.8% y/y), remaining below the July record. The number of private-sector hires declined 3.1% (+2.3% y/y) to the lowest level since April. Factory sector hiring fell 7.2% (+20.2% y/y). Hiring in education & health services fell 1.7% (+5.7% y/y). Professional & business service sector hiring eased 0.4% (+0.6% y/y) and remained below the record 1.200 million reached in July. Hiring in trade, transportation & utilities eased 0.2% (-6.6% y/y) and was 11.5% below its high in February 2016. The number of leisure & hospitality jobs fell 4.2% (+2.8% y/y), construction sector hires rose 1.9% (18.9% y/y). Government sector employment increased 3.2% (-4.6% y/y).

A high level of job turnover was evident in the total job separations rate as it held steady at 3.6%. The leisure & hospitality separations rate rose to 6.3%, but remained down from last year's 6.6% high. The construction sector's separations rate increased to 5.3%, close to that same high level since December. The professional and business services rate increased to 5.4%. In trade, transportation & utilities, the separations rate declined to 3.6%. The information sector's rate rose to 3.2%. The factory sector separations rate gained 2.6% and equaled its expansion high. The separations rate in the financial sector declined to 2.2%. The separations rate in the government sector held steady at 1.5%. Separations include quits, layoffs, discharges, and other separations as well as retirements.

The layoff and discharge rate remained at 1.2%, up from 1.0% one year ago. The private-sector rate held at 1.3% but remained below the 2015 high of 1.5%. The government sector rate remained at 0.5%, near the recovery low. Total layoffs increased 12.3% y/y. Private-sector layoffs increased 13.5% y/y, while government layoffs declined 3.7% 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) Sep Aug Jul Sep '16 2016 2015 2014
Job Openings, Total
 Rate (%) 4.0 4.0 4.0 3.8 3.7 3.6 3.3
 Total (000s) 6,093 6,090 6,140 7.5% 3.1% 12.1% 28.1%
Hires, Total
 Rate (%) 3.6 3.7 3.8 3.6 43.6 43.5 42.4
 Total (000s) 5,273 5,420 5,521 1 .8% 1.2% 5.8% 8.2%
Layoffs & Discharges, Total
 Rate (%) 1.2 1.2 1.2 1.0 13.7 14.8 14.7
 Total (000s) 1,703 1,781 1,789 12.3% -4.8% 2.8% 2.3%
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