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Economy in Brief

U.S. JOLTS: Job Opportunities Increase but Hiring Lags
by Tom Moeller  September 9, 2020

• Job openings become more available.

• Hiring slows.

• Layoffs ease while quits rise.

The Bureau of Labor Statistics reported that the total job openings rate rose to 4.5% during July, the highest level since last October and up from April's low of 3.7%. The openings rate is calculated as job openings as a percent of total employment plus jobs that have not yet been filled. July's figures remained below the 4.8% record in January 2019. The hiring rate declined to 4.1% after surging to a record 5.4% in May. The overall layoff and discharge rate fell to 1.2% after leveling in May and June at 1.4% versus 5.9% in April. The quits rate rose to 2.1%, a five-month high. It nevertheless remained below the record 2.4% in July of last year. These figures date back to December 2000.

As of the last business day of July, the job openings level rose to 6.618 million, down 8.5% y/y. The job openings level in the construction sector fell 5.4% y/y and in manufacturing by 14.5% y/y. It fell by 20.6% y/y in leisure & hospitality and by 6.8% y/y in the professional & business service sector. In government, the number of job openings declined 5.1% y/y.

The private-sector job openings rate rose to 4.8%, slightly below the record rate of 5.1% reached in January 2019. The construction sector's job openings rate increased m/m to 4.4% but remained below 5.4% at its peak in April 2019. The rate in manufacturing surged m/m to 3.3%, the highest level since September 2019. The rate in leisure & hospitality fell to 5.7% from the record 6.6% in June but the rate in professional & business services improved to 5.7%, a five-month high. The government sector job openings rate held at 3.0%, up slightly from its May low of 2.9% but remained lower than the February record of 3.3%.

In July, the level of hiring fell 17.0% to 5.787 million (-3.1% y/y) following a 3.2% June decline. The hiring rate fell sharply to 4.1%, down from the record 5.4% in May. Private sector hiring fell 2.7% y/y and government hiring was off 10.0% y/y. Hiring in the factory sector fell 4.2% y/y but leisure & hospitality hiring rose 4.3% y/y. Professional & business service sector hiring weakened 4.9% y/y and education and health services hiring declined 2.0% y/y.

Data on job separations reflect a combination of layoffs and quits. The steady total separations rate of 3.6% compared to the record 9.7% in March. The level of separations declined 13.2% y/y. Private sector separations fell 13.0% y/y and the separations rate remained at 4.0%, up from the near-record low of 3.5% in May. The separations rate was 6.4% in leisure & hospitality, lower than 32.7% in March. Professional & business realized a 5.1% rate after surging to a record 8.0% in March. At 2.5%, the separations rate in education & health services was little-changed near the record low of 2.4%.

The layoff & discharge rate in the private sector eased to a near-record low of 1.2%. It was a record low of 0.3% in government. The fairly steady 2.8% rate in construction compared to a lessened 1.3% in manufacturing. The 0.8% rate in the information sector was down from a record 3.7% in April. It compared to 0.8% in finance. The professional & business services layoff & discharge rate of 2.1% compared to a record 5.1% in March.

The higher quits rate of 2.4% in the private sector remained up from 1.6% April. It compared to an increased 0.7% in government. In manufacturing, the job quits rate eased m/m to 1.4%, but remained up from a 0.9% low in April. In finance, it rose to 1.1% from a 0.8% cycle-low in April. The quits rate in professional & business services surged to 2.7%, but eased to a still-high 4.0% y/y in leisure & hospitality. The level of job quits in the private sector fell 18.5% y/y and 15.6% y/y in government.

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) Jul Jun May Jul'19 Jul'18 Jul'17
Job Openings, Total
 Rate (%) 4.5 4.2 3.9 4.6 4.7 4.2
 Total (000s) 6,618 6,001 5,371 7,236 7,326 6,354
Hires, Total
 Rate (%)  4.1 5.1 5.4 4.0 3.8 3.7
 Total (000s) 5,787 6,970 7,199 5,975 5,691 5,502
Layoffs & Discharges, Total
 Rate (%) 1.2 1.4 1.4 1.2 1.2 1.3
 Total (000s) 1,721 1,995 1,903 1,763 1,807 1,958
Quits, Total
 Rate (%) 2.1 1.9 1.6 2.4 2.3 2.1
 Total (000s) 2,949 2,605 2,067 3,612 3,443 3,118
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