U.S. JOLTS: Job Market Continues to Improve in June

• Job openings are more numerous.

• Hiring expands.

• Layoffs are steady while quits rise.

The Bureau of Labor Statistics reported that the total job openings rate rose to 4.1% during June, the highest level since February 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. June's figures remained well below the 4.8% record in January 2019. The hiring rate eased to 4.9% after surging to a record 5.4% in May, revised from 4.9%. The overall layoff and discharge rate remained at 1.4% after plummeting in May from 5.9% in April and 7.6% in March. In a sign of individuals' comfort in leaving and then finding a new job, the quits rate rose to 1.9% from 1.6% in May and 1.4% in April. It nevertheless remained below the record 2.4% last July. These figures date back to December 2000.

As of the last business day of June, the job openings level rose a still depressed 5.889 million, down 18.0% y/y. The job openings level in the construction sector fell by one-quarter y/y and in manufacturing by nearly one-third y/y. It fell by 10.8% y/y in leisure & hospitality and by 21.6% y/y in the professional & business service sector. In government, the number of job openings declined 6.5% y/y.

The private-sector job openings rate rose modestly to 4.3%, but remained below the record rate of 5.1% reached in January 2019. The construction sector's job openings rate fell m/m to 3.3% and remained below 5.4% at its peak in April 2019. The rate in manufacturing edged higher m/m to 2.7% but was below 3.6% one year earlier. The rate in leisure & hospitality surged to a record 6.6% but the rate in professional & business services was fairly steady at 4.9%. The government sector job openings rate held at 2.9% and was below the February record of 3.3%.

In June, the level of hiring fell 7.0% to 6.696 million (+16.3% y/y) following a May strengthening, that was revised up. The hiring rate fell to 4.9% from the record 5.4%, revised up from 4.9%. Private sector hiring improved 18.8% y/y but government hiring was off by one-quarter y/y. Hiring in the factory sector rose more than one-third y/y while leisure & hospitality hiring also jumped 42.9% y/y to a record high. Professional & business service sector hiring improved 6.2% y/y but education and health services hiring improved by roughly one-quarter y/y.

Data on job separations reflect a combination of layoffs and quits. The total separations rate of 3.5% compared to the record 9.7 % in March. The level of separations declined 14.5 y/y. Private sector separations fell 13.5% y/y and the separations rate recorded a near-record low of 3.9%. The separations rate was 7.0% in leisure & hospitality, lower than 32.7% in March. Professional & business realized a drastically lower 4.6% rate after surging to a record 8.0% in March. The separations rate in education & health services was near the record low of 2.5%.

The layoff & discharge rate in the private sector eased to 1.5% after rising to a record 8.8% in March. It was near the record low of 0.4% in government. The steady 2.5% rate in construction compared to 1.4% in manufacturing. The 1.0% 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 2.0% compared to a record 5.1% in March.

The higher quits rate of 2.1% in the private sector remained down from the record 2.7% rate in July 2019. It compared to a greatly reduced 0.5% in government. In manufacturing, the job quits rate surged to 1.6%, up from 0.9% in April. In finance it held steady at 1.0%. The quits rate in professional & business services strengthened to 2.3% and surged to 3.9% y/y in leisure & hospitality. The level of job quits in the private sector fell 24.4% y/y and 42.1% y/y in government.

The Economy and Monetary Policy in Our Challenging Times from Loretta J. Mester, President & CEO, Federal Reserve Bank of Cleveland is available here.

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