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Economy in Brief

U.S. JOLTS: Job Openings Reach Record Level During May
by Tom Moeller  July 7, 2021

• Total job openings rate is unchanged, but mixed across industries.

• Hiring rate slips.

• Layoffs decline while quits increase.

The Bureau of Labor Statistics reported that on the last business day of May, the level of job openings rose slightly m/m to a record 9.209 million from 9.193 million in April, revised from 9.286 million. The latest increase of 16,000 (69.1% y/y) was the smallest of five straight monthly gains. The total job openings rate remained at the record 6.0% it reached in April. The openings rate is calculated as job openings as a percent of total employment plus jobs that have not yet been filled. The hiring rate eased to 4.1% from 4.2%, but remained higher than 3.8% in January & December. The overall layoff & discharge rate eased to a record low of 0.9% from a downwardly revised 1.0% in April. The quits rate fell to 2.5% after surging to a record high of 2.8% in April, revised from 2.7%. The number of quits has risen by roughly two-thirds y/y. The JOLTS figures date back to December 2000.

The private-sector job openings rate held at the record 6.3% in May, revised from 6.4%. It was increased from 4.1% last May. The leisure & hospitality rate was little changed at a record 9.0% while the professional & business services rate fell to 6.7% from April's upwardly revised 7.1%. The factory sector job openings rate held near the record at 6.2% but the education & health services rate rose to a record 6.5%. The construction sector rate fell to 3.9% from 4.5%. The government sector job openings rate eased slightly in May to 4.0%, but remained near the record high. The private sector job openings level edged 0.5% higher, up by roughly three-quarters y/y, to 8.305 million.

Employers are continuing to experience trouble finding workers as hiring has lagged job openings. In May, the private sector hiring rate held at 4.6% and was below the level of 4.7% six months earlier. It remained well below the record 7.2% in May of last year. The leisure & hospitality hiring rate declined to 9.3% from 19.5% twelve months earlier. The professional & business service sector hiring rate has fallen sharply to 4.6% from 6.8% nine months earlier. The construction sector's hiring rate weakened to 4.2% from 5.9% in March, but the factory sector hiring rate edged higher to 3.4%, up from a 2.9% low in January. The government sector hiring rate edged down to 1.4%, nearly the lowest level in roughly one year and below the 2.6% high nine months earlier. The level of private sector hiring eased 0.7% in May (-29.9% y/y) to 5.619 million.

Data on job separations reflect a combination of layoffs and quits. The separations rate of 3.7% in May compared to the record 10.8% in March of last year. The level of separations rose 15.2% y/y. Private sector separations increased 21.0% y/y and the private separations rate fell to 4.1% from 4.5% in April. The government's separation rate eased to 1.3%, a five-year low.

The layoff & discharge rate in the private sector held steady at the record low of 1.1% in May. The professional & business services layoff & discharge rate eased to 1.3% and remained down versus 2.3% twelve months earlier. The 2.1% rate in construction compared to a steady 0.9% rate in manufacturing. The 0.9% rate in the information sector remained near the 0.5% in the financial sector. It compared to a record low of 0.3% in government.

As the labor market firms, workers look for new job opportunities. The 2.8% quits rate in the private sector was down modestly m/m but remained up from 1.8% twelve months earlier. It has been trending higher since the August 2009 low of 1.3%. It compared to 0.8% in government. In the leisure & hospitality sector, the quits rate held steady at a near-record 5.3%. The quits rate in professional & business services fell sharply to 2.8% from the record high of 3.7% in April. In manufacturing, the job quits rate eased to 2.1% but remained up from 1.2% in May of last year. In finance, the quits rate eased to 1.4%. The level of job quits in the private sector increased by roughly three-quarters y/y. In government, the level of quits fell 14.9% y/y.

The Job Openings and Labor Turnover Survey (JOLTS) are available in Haver's USECON database.

The minutes to the latest FOMC meeting can be found here.

JOLTS (Job Openings & Labor Turnover Survey, SA) May Apr Mar May'20 May'19 May'18
 Rate (%) 6.0 6.0 5.4 3.9 4.6 4.5
 Total (000s) 9,209 9,193 8,288 5,447 7,279 6,987
Hires, Total
 Rate (%)  4.1 4.2 4.2 6.2 3.8 3.9
 Total (000s) 5,927 6,012 6,006 8,272 5,719 5,865
Layoffs & Discharges, Total
 Rate (%) 0.9 1.0 1.1 1.6 1.2 1.2
 Total (000s) 1,368 1,450 1,525 2,096 1,776 1,767
Quits, Total
 Rate (%) 2.5 2.8 2.5 1.7 2.3 2.3
 Total (000s) 3,604 3,992 3,568 2,206 3,487 3,401
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