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Economy in Brief

U.S. JOLTS: Job Opportunities Fall but Hiring Improves
by Tom Moeller  October 6, 2020

• Job openings are fewer in number.

• Hiring increases modestly.

• Layoffs and quits decline.

The Bureau of Labor Statistics reported that on the last business day of August, the total job openings rate eased to 4.4% from 4.6% during July, revised from 4.5%. The openings rate is calculated as job openings as a percent of total employment plus jobs that have not yet been filled. The August figure remained below the 4.8% record in January 2019. The hiring rate held steady at 4.2%. July's rate was revised from 4.1%. The overall layoff and discharge rate fell to 1.0% versus 1.3% in July. The quits rate eased to 2.0% from a five-month high of 2.1%. It nevertheless remained below the record 2.4% in July of last year. These figures date back to December 2000.

The job openings level dropped 3.0% to 6.493 million, down 9.4% y/y. The job openings level in the construction sector fell 25.2% y/y but in manufacturing, it rose 3.4% y/y. It fell by 17.1% y/y in leisure & hospitality and by 8.2% y/y in the professional & business service sector. In government, the number of job openings rose 16.1% y/y.

The private-sector job openings rate declined to 4.5% and remained below the record rate of 5.1% reached in January 2019. The construction sector's job openings rate fell sharply to 3.5% and remained well below its 5.4% peak in April 2019. The rate in manufacturing rose m/m to 3.7%, the highest level since June 2019. The rate in leisure & hospitality held steady at 5.8% but was below the record 6.6% in June. The rate in professional & business services held at 5.6%, up from 4.8% three month earlier. The government sector job openings rate rose to a record high of 3.8%. July was revised sharply higher to 3.7%.

In August, the level of hiring improved 0.3% to 5.919 million (1.4% y/y) following a 15.3% July decline. The hiring rate held steady at 4.2%, down from the record 5.4% in May. The private sector hiring rate eased to 4.5% but the government sector hiring rate surged to a near-record 2.6%. The factory sector hiring rate improved to 3.2% but the leisure & hospitality rate fell sharply to 7.5%. The professional & business service sector hiring rate eased to 5.6% after being elevated at 5.8% in July and the education & health services hiring rate declined to 3.1%, after surging to 4.9% in May.

Data on job separations reflect a combination of layoffs and quits. The separations rate of 3.3% compared to the record 9.7% in March. The level of separations declined 18.8% y/y. Private sector separations fell 18.6% y/y and the separations rate fell to 3.6%, just above the record low of 3.5% in May. The separations rate fell to 5.4% in leisure & hospitality, lower than 32.7% in March. Professional & business realized a separations rate of 4.4% after surging to a record 8.0% in March. At 2.7%, the separations rate in education & health services was unchanged, just above May's record low of 2.4%.

The layoff & discharge rate in the private sector declined to a record low of 1.2% in August. It was a record low of 0.3% in government. The fairly steady 2.8% rate in construction compared to a lessened 0.9% in manufacturing. The 0.9% rate in the information sector was below the record 3.7% in April. It compared to 0.6% in finance. The professional & business services layoff & discharge rate was a record low of 1.5% and compared to an all-time high of 5.1% in March.

The higher quits rate of 2.2% in the private sector remained up from 1.6% in April. It compared to an increased 0.6% in government. In manufacturing, the job quits rate surged to a near-record 1.7%, up from 0.9% in April. In finance, it jumped to 1.4% from a 0.8% cycle low in April. The quits rate in professional & business services eased to 2.6% and fell sharply to 3.7% y/y in leisure & hospitality. The level of job quits in the private sector fell 21.0% y/y and 24.3% 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) Aug Jul Jun Aug'19 Aug'18 Aug'17
Job Openings, Total
 Rate (%) 4.4 4.6 4.2 4.5 4.6 4.1
 Total (000s) 6,493 6,697 6,001 7,166 7,249 6,335
Hires, Total
 Rate (%)  4.2 4.2 5.1 3.9 3.9 3.8
 Total (000s) 5,919 5,903 6,970 5,839 5,792 5,528
Layoffs & Discharges, Total
 Rate (%) 1.0 1.3 1.4 1.2 1.2 1.3
 Total (000s) 1,473 1,745 1,995 1,792 1,796 1,866
Quits, Total
 Rate (%) 2.0 2.1 1.9 2.3 2.3 2.1
 Total (000s) 2,793 2,932 2,605 3,544 3,446 3,126
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