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Economy in Brief

U.S. JOLTS: Job Openings Decline Sharply But Hiring Improves
by Tom Moeller  February 11, 2020

The Bureau of Labor Statistics reported that the total job openings rate declined to 4.0% during December from an unrevised 4.3% in November. It was the lowest openings rate in two years and remained below the 4.8% record high in January 2019. The job openings rate is the job openings level as a percent of total employment plus the job openings level. The hiring rate improved to 3.9% but has been moving sideways since early last year. Separately, employers became less inclined to let workers go. The layoff & discharge rate held steady m/m at 1.2% and remained near the record low. The quits rate held m/m at 2.3% but has been trending higher for ten years.

The private-sector job openings rate fell sharply m/m to 4.2% and remained below the high of 5.2% in November 2018. The government sector job openings rate declined m/m to 2.9% but remained above the 2009 low of 1.2%.

The level of job openings fell 5.4% (-14.1% y/y) to 6.423 million. It was the lowest level in two years. Private-sector job openings fell 16.3% y/y, but government sector job openings increased 10.5% y/y.

Hiring activity improved slightly at yearend. The private-sector hiring rate rose to 4.3%. It remained below the July 2019 expansion high of 4.4% and has been moving sideways since the middle of 2019. The hiring rate in government fell to 1.5% and was below the January 2019 high of 1.8%.

Total hiring improved 1.4% m/m and rose 3.3% y/y. Hiring in the private sector rose 1.9% (3.9% y/y). Government sector hiring declined, however, by 6.3% (-5.5% y/y) to the lowest level in six months.

Individuals are ready to find new work. The overall job separations rate (measuring quits & layoffs) increased to 3.8%, equaling the highest level since April 2008. That was increased from 3.0% in 2012. The private sector separations rate similarly rose to 4.2%. The separations rate in government held steady at 1.5%.

The total level of separations rose 4.8% y/y but it has fallen recently. Private sector separations rose 5.3% y/y but separations in the government sector declined 3.2% y/y.

The level of quits fell 2.2% m/m but remained up 2.9% y/y, suggesting confidence in finding work has generally improved. The quits rate held steady m/m at 2.3% and was sharply higher versus 1.3% at the beginning of the expansion. The private-sector quits rate remained high at 2.5%, increased from 1.4% in the fall of 2009. The government sector quits rate of 0.8% held steady m/m, but was double the rate at the beginning of the economic expansion.

The level of layoffs increased 7.2% m/m and rose 8.2% y/y. In the private sector, layoffs rose 10.0% y/y as the layoff rate rose to 1.4% from its 1.2% low early in the year. Nevertheless, it remained below the 2009 high of 2.2%. Layoffs declined 22.4% y/y in the government sector, and the layoff rate eased to 0.3%.

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

Semiannual Monetary Policy Report to the Congress by Fed Chair Jerome H. Powell is available here.

JOLTS (Job Openings & Labor Turnover Survey, SA) Dec Nov Oct Dec'18 Dec'17 Dec'16
Job Openings, Total
 Rate (%) 4.0 4.3 4.6 4.7 4.0 3.9
 Total (000s) 6,423 6,787 7,361 7,479 6,204 5,831
Hires, Total
 Rate (%)  3.9 3.8 3.8 3.8 3.7 3.7
 Total (000s) 5,907 5,827 5,782 5,717 5,488 5,408
Layoffs & Discharges, Total
 Rate (%) 1.2 1.2 1.2 1.2 1.2 1.2
 Total (000s) 1,895 1,768 1,795 1,751 1,787 1,769
Quits, Total
 Rate (%) 2.3 2.3 2.3 2.3 2.2 2.0x
 Total (000s) 3,488 3,568 3,497 3,391 3,189 2,963
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