• Both the job openings rate & the number of openings improve.

• Hiring activity weakens.

• Layoffs decline as the level of quits increases.

The Bureau of Labor Statistics reported that on the last business day of December, the total job openings rate rose to 4.5% and reversed November's decline to an unrevised 4.4%. The openings rate is calculated as job openings as a percent of total employment plus jobs that have not yet been filled. The December figure remained below the 4.8% record in January 2019. The hiring rate fell sharply to 3.9% following five months at 4.2%. The overall layoff and discharge rate eased to 1.3% and reversed some of its November increase to 1.4%. The quits rate rose sharply to 2.3%, the highest level since February and up from a 1.4% low during April. These figures date back to December 2000.

The job openings level rose 1.1% (1.4% y/y) to 6.646 million. The private-sector job openings rate rose to 4.8%, its highest level since October 2019. It remained below the record rate of 5.1% reached in January 2019. The construction sector's job openings rate fell sharply to 2.6% and remained well below its 5.4% peak in April 2019. The rate in manufacturing also fell m/m to 3.7% from 4.2%, but remained up from 2.4% in March. The rate in leisure & hospitality fell to 5.5%, remaining below the record 6.6% in June. The rate in professional & business services surged to 6.9% and matched the record high. The government sector job openings rate fell sharply to 2.7%, a two year low.

In December, the level of hiring declined 6.7% (-6.5% y/y) to 5.539 million. The hiring rate fell sharply to 3.9%, remaining well below the record 5.4% in May. The private sector hiring rate declined sharply to 4.3%. The government sector hiring rate eased to 1.5%, down from 2.5% in August. The factory sector hiring rate held steady at 3.2%. The leisure & hospitality rate fell sharply to 6.0% from 8.0%. The professional & business service sector hiring rate eased to 5.7%. The education & health services hiring rate slipped m/m to 3.0%, a nine-month low.

Data on job separations reflect a combination of layoffs and quits. The separations rate of 3.8% in December compared to the record 9.7% in March. The level of separations declined 5.2% y/y. Private sector separations fell 5.3% y/y but the separations rate was steady at 4.2%, above the record low of 3.5% in May.

The layoff & discharge rate in the private sector eased to 1.4% but remained above the record low of 1.1% in September. The rate fell sharply m/m to 0.4% in government. The lessened 2.3% rate in construction still was above the record low of 1.9% in September and compared to 1.0% in manufacturing. The higher 1.1% rate in the information sector remained below the record 3.7% in April. It compared to a steady 0.6% in finance. The professional & business services layoff & discharge rate fell slightly to 1.8% but was down from an all-time high of 5.1% in March.

The higher quits rate of 2.6% in the private sector remained up from 1.6% in April. It compared to a steady 0.8% in government. In manufacturing, the job quits rate was steady m/m at 1.9% and remained up from 0.9% in April. In finance, the quits rate fell sharply to 1.1% and remained below the high of 1.8% in August of 2019. The quits rate in professional & business services eased to 2.9% after surging to 3.1% in September which was the highest level since January. In leisure & hospitality, the quits rate surged to a near-record 4.9%. The level of job quits in the private sector fell 6.4% y/y. In government, the level of quits declined 14.2% y/y.

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

Climate Change Is a Source of Financial Risk from the Federal Reserve Bank of San Francisco is available here.