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Economy in Brief

U.S. JOLTS: Job Openings Start to Evaporate in March
by Tom Moeller  May 15, 2020

• Data indicate severe weakness in labor market.

• Hiring weakens as job openings start to disappear.

• Layoffs surge. Fewer quits suggest workers have no option but to stay put.

The Bureau of Labor Statistics reported that the total job openings rate declined to 3.9% during March from 4.4% in February. It is the lowest level since May 2017. The openings rate is calculated as job openings as a percent of total employment plus jobs that have not yet been filled. These figures remained below the 4.8% record in January 2019. The hiring rate plummeted in March to 3.4% from 3.8% to the lowest level since February 2014. The layoff and discharge rate spiked to a record 7.5% from 1.2% in February. The quits rate plunged to 1.8% from 2.3%.

As of the last business day of March, the job openings level totaled 6.191 million, down 15.9% y/y. In the private sector, they fell 17.6% y/y, but were off just 1.2% y/y in government. The level of job openings fell by roughly one-quarter y/y in manufacturing. The number of job openings plummeted by roughly one-third y/y in leisure & hospitality but declined 9.5% y/y in professional & business services.

The private-sector job openings rate declined to a roughly three-year low of 4.1%, down from the record rate of 5.1% reached in January 2019. The construction sector's job openings rate of 3.1% compared to 5.4% at its peak in April of last year. The rate in manufacturing fell to a roughly three-year low of 2.4%. The rate in leisure & hospitality collapsed and fell moderately in professional & business services. The government sector job openings rate eased modestly from the February record 3.3%.

In March, the level of hiring fell 11.2% to 5.206 million with the hiring rate drastically weaker at 3.4%. Private sector hiring declined 9.4% y/y but government hiring jumped 5.7% y/y. Hiring in the factory sector fell 15.1% while leisure & hospitality hiring fell more than one-third y/y. Professional & business service sector hiring fell moderately y/y.

Data on separations reflect a combination of layoffs and quits. The total separations rate surged to a record 9.6% as the level of separations increased by 161.4% y/y. The surge in the level of separations was driven by the private sector. The rate was 33.3% in leisure & hospitality, up from 6.1% in February. Professional & business realized a 7.3% rate, and it surged to a record 6.9% in education & health services.

The layoff & discharge rate in the private sector jumped to 8.7% while it was stable at 0.8% in government. The rate of 8.1% in construction compared to 4.4% in manufacturing. The 2.1% rate in the information sector was nearly a record and compared to a record 2.5% in finance. The professional & business services layoff & discharge rate jumped to a record 4.4%.

The quits rate dropped to the 2014 low of 1.8%. The private sector quits rate of 2.0% compared to 0.8% in government. The level of job quits in the private sector fell roughly one-quarter y/y and by 0.6% y/y in government. In manufacturing, the level of job quits declined by roughly one-third y/y but held steady y/y in finance. The number of quits in professional & business services declined 17.6% y/y and fell 29.2% y/y in leisure & hospitality.

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

JOLTS (Job Openings & Labor Turnover Survey, SA) Mar Feb Jan Mar'19 Mar'18 Mar'17
Job Openings, Total
 Rate (%) 3.9 4.4 4.4 4.7 4.4 3.8
 Total (000s) 6,191 7,004 7,012 7,364 6,865 5,816
Hires, Total
 Rate (%)  3.4 3.8 3.9 3.8 3.8 3.7
 Total (000s) 5,206 5,864 5,925 5,689 5,629 5,395
Layoffs & Discharges, Total
 Rate (%) 7.5 1.2 1.1 1.1 1.2 1.2
 Total (000s) 11,372 1,846 1,741 1,698 1,794 1,749
Quits, Total
 Rate (%) 1.8 2.3 2.3 2.3 2.2 2.1
 Total (000s) 2,782 3,436 3,574 3,525 3,301 3,134
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