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Economy in Brief

U.S. JOLTS: Job Openings Rate Dips; Hiring Weakens
by Tom Moeller  July 9, 2019

The Bureau of Labor Statistics reported that the total job openings rate eased to 4.6% during May from an unrevised 4.7% in April. It was unchanged from twelve months earlier. The job openings rate is the job openings level as a percent of total employment plus the job openings level. The ability to find workers to fill openings also weakened. The hiring rate slipped to 3.8% from the record 3.9% in April. Employers let people go at a steady rate as shown by the layoff & discharge rate which held m/m at 1.2%, up from the record low of 1.1% in March. Individuals remained ready to find new work. The quits rate held steady at a near-record 2.3% where it's been since June of last year.

The private-sector job openings rate held steady m/m at 4.9%, and remained below the 5.2% record reached in November. The rate was increased from 4.6% early last year and from the 2.0% average at the recession low in 2009. In professional & business services, the rate rose to 5.8% but was below January's 6.5%. In leisure & hospitality, the rate improved to 5.9%, still below December's high of 6.2%. In education & health services, the rate increased to 5.2%, up from 2.6% in 2010. In trade, transportation & utilities, the rate declined returned to the recent low of 4.6%. The rate declined to 4.7% in the construction sector, down from the record 5.5% in April. In manufacturing, it returned to a record of 3.8%, up from 3.6% twelve months earlier. The government sector job openings rate slipped to 2.9% from the record 3.1% and remained up sharply from the 2009 low of 1.2%.

The level of job openings declined 0.7% (+2.8% y/y) to 7.323 million after falling 1.4% in April. Job availability was plentiful. Private-sector openings rose 1.8% y/y while government sector job openings jumped 13.8% y/y.

Hiring activity eased. The private-sector hiring rate declined to 4.2% and fell below the expansion high of 4.4% reached twelve months earlier. The rate in leisure & hospitality slipped to 6.6%. In professional & business services, the hiring rate fell sharply to 5.2% and remained below the June 2017 high of 6.1%. The construction sector's hiring rate slipped to 5.4%. The hiring rate in trade, transportation & utilities rose slightly to 4.2%, but was down sharply from 4.4% in November. In education & health services, the rate eased to 2.8% after five months at 3.0%. In manufacturing, the hiring rate slipped to 2.7%. This hiring rate was reduced from the July 2018 high of 3.1%. The hiring rate in government remained at 1.7%.

Total hiring declined 4.4% (-2.3% y/y) to 5.725 million. Hiring in the private sector fell 2.9% y/y while government sector hiring gained 6.0% y/y.

Individuals were somewhat less inclined to find new work. The overall job separations rate fell to 3.6% and remained below October's expansion high of 3.8%. The private sector separations rate declined slightly to 4.0% and remained below the cycle high of 4.2% reached in July. It was up, however, from the recession low of 3.4%. The separations rate in government held steady at 1.6%.

The total level of separations was steady y/y. In the private sector, the 0.7% y/y decline reflected a 5.7% y/y fall in professional & business services and a 0.7% y/y easing in leisure & hospitality. Offsetting these declines was a 15.0% y/y surge in the construction sector. In educational and health services, separations were unchanged y/y, but separations in trade, transportation & utilities increased 6.1% y/y. Leisure & hospitality job separations eased 0.7% y/y and in manufacturing, they declined 2.6% y/y. Separations in the government sector increased 8.3% y/y.

The level of quits rose 2.5% y/y to 3.425 million in May as confidence in finding work remained high. The quits rate of 2.3% was increased sharply from 1.3% at the beginning of the expansion. The private-sector quits rate eased to 2.5%, about where it's been for a year, remaining up from 1.4% in the fall of 2009. The government sector quits rate jumped to a record 1.0%.

The level of layoffs declined 2.8% y/y. In the private sector, layoffs fell 3.0% y/y, but the layoff rate remained near the record low of 1.3%, down from the 2009 high of 2.2%. Layoffs rose 1.1% y/y in the government sector and the layoff rate eased to 0.4%.

The Job Openings & Labor Turnover Survey (JOLTS) dates to December 2000 and the figures are available in Haver's USECON database.

JOLTS (Job Openings & Labor Turnover Survey, SA) May Apr Mar May'18 May'17 May'16
Job Openings, Total
 Rate (%) 4.6 4.7 4.7 4.6 3.8 3.9
 Total (000s) 7,323 7,372 7,474 7,126 5,821 5,775
Hires, Total
 Rate (%)  3.8 4.0 3.8 3.9 3.7 3.6
 Total (000s) 5,725 5,991 5,697 5,862 5,469 5,228
Layoffs & Discharges, Total
 Rate (%) 1.2 1.2 1.1 1.2 1.2 1.2
 Total (000s) 1,760 1,830 1,693 1,811 1,796 1,795
Quits, Total
 Rate (%) 2.3 2.3 2.3 2.2 2.1 2.1
 Total (000s) 3,425 3,516 3,461 3,342 3,138 3,023
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