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Economy in Brief

July JOLTS: Openings Rose, Hires and Separations Slipped
by Sandy Batten  August 30, 2022

• The number of job openings edged up, the first monthly increase in four months.

• New hires continued to ease.

• Separations edged down with small declines in both quits and layoffs.

Job openings rose 199,000 in July to 11.239 million (+1.8% m/m, +4.2% y/y) following an upwardly revised 11.040 million in June (initially 10.698 million), according the Bureau of Labor Statistics' Job Openings and Labor Turnover report. A small decrease had been expected. This was the first monthly increase in four months. The series high was 11.855 million reached in March. The job openings rate (job openings as a percentage of the sum of establishment employment plus openings) edged up to 6.9% in July from 6.8% in June. Its series high was also in March at 7.3%. These series extend back to December 2000.

With the number of openings rising in July while the number unemployed fell, the excess of openings over the number unemployed rose to 5.569 million, the third highest on record. This is a clear indication that even though the pace of economic activity has slowed, the labor market remains quite tight. The increase in openings in July was concentrated in Trade and in Government.

While labor-market conditions remain quite robust, they do appear to be softening on the margin. New hires slipped 74,000 to 6.382 million (-1.1% m/m, -2.7% y/y) in July, their seventh monthly decline in the past eight months and a clear continuation of their downtrend since February. The July decline was widely spread, led by a 59,000 decline in Leisure and Hospitality.

The total number of job separations fell 80.000 to 5.929 million in July (-1.3% m/m, +0.9% y/y), their third monthly decline in the past four months, from 6.009 million in June. Separations were largest in Leisure and Hospitality and in Healthcare. Quits fell 74,000 (-1.7% m/m, +2.2% y/y) to 4.179 million in July, their lowest level since last October, from 4.253 million. Elevated quits, which are voluntary, indicate that jobs are sufficiently available for workers to quit their existing job to find another. So, a decline points to a decrease in confidence in the labor market. The July decline was concentrated in Healthcare. The quit rate slipped to 2.7% from 2.8% in June.

Layoffs and discharges, involuntary separations, were essentially unchanged in July, falling 2.000 to 1.398 million (-0.1% m/m, -2.9% y/y). They have generally moved sideways over the past several months but remain above the series low of 1.262 million reached in December 2021. The layoff rate was unchanged at 0.9%. Other separations slipped 4,000 to 352,000 in July.

Private-sector job openings rose 100,000 in July to 10.154 million (+1.0% m/m, +3.4% y/y) in June. Total private-sector hires fell 53,000 to 5.980 million (-0.9% m/m, -2.7% y/y) while total private-sector separations edged down 32,000 to 5.587 million (-0.6% m/m, +0.9% y/y).

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

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