U.S. JOLTS: Job Market Recalibrates

• Job openings increase.

• Hiring strengthens.

• Layoffs fall dramatically and quits rise.

The Bureau of Labor Statistics reported that the total job openings rate rose to 3.9% during May and recovered April's decline due to coronavirus restrictions to 3.7%. The openings rate is calculated as job openings as a percent of total employment plus jobs that have not yet been filled. These figures remained below the 4.8% record in January 2019. The hiring rate surged to a record 4.9% in May from 3.1% in April, revised from 2.7%. The overall layoff and discharge rate plummeted to 1.4%, down from 5.9% in April and 7.6% in March. The quits rate rose to 1.6% from 1.4% in April, but was below the record 2.4% last July. These figures date back to December 2000.

As of the last business day of May, the job openings level rose a still depressed 5.397 million, down 26.1% y/y. The job openings level fell 2.1% y/y in the construction sector but by nearly one-third y/y in manufacturing. It fell by roughly one-half y/y in leisure & hospitality and by 22.6% y/y in the professional & business service sector. In government, the number of job openings declined 6.6% y/y.

The private-sector job openings rate rose to 4.1%, but remained below the record rate of 5.1% reached in January 2019. The construction sector's job openings rate jumped m/m to 4.9% but remained below 5.4% at its peak in April 2019. The rate in manufacturing held steady m/m at 2.7%, down versus 3.6% one year earlier. The rate in leisure & hospitality jumped to 5.3% after collapsing to 3.5% in April and the rate in professional & business services declined to 4.8% from 5.6% in May 2019. The government sector job openings rate held at 3.0% and was below the February record of 3.3%.

In May, the level of hiring improved 14.1% y/y to 6.487 million as the hiring rate surged to a record 4.9%. Private sector hiring improved  16.9% y/y but government hiring was off 29.1% y/y. Hiring in the factory sector rose by one-quarter y/y while leisure & hospitality hiring also jumped roughly one-quarter y/y to a record high. Offsetting these gains, professional & business service sector hiring fell 23.4% y/y but education but health services hiring recovered by roughly one-half y/y.

Data on job separations reflect a combination of layoffs and quits. The total separations rate plummeted to 3.1%, down from 7.6% in April and the record 9.7% in March. The level of separations declined by one-quarter y/y. The drop in the level of separations was driven by the private sector. The separations rate was 6.3% in leisure & hospitality, lower than 32.7% in March. Professional & business realized a drastically lower 4.2% rate after surging to a record 8.0% in March. The separations rate in education & health services plummeted m/m to nearly a record low of 2.4%.

The layoff & discharge rate in the private sector dropped to 1.5% after jumping to a record 8.8% in March. It fell to 0.6% in government but remained up from a record low of 0.3% in December. The 2.7% rate in construction compared to 1.0% in manufacturing. The 1.1% rate in the information sector was down from a record 3.7% in April. It compared to 0.7% in finance. The professional & business services layoff & discharge rate declined to 1.8% after jumping to a record 5.1% in March.

The slightly higher quits rate of 1.8% in the private sector remained down drastically from a near record 2.6% a year earlier. It compared to a greatly lessened 0.5% in government. The level of job quits in the private sector fell 40.5% y/y  and 43.8% y/y in government. In manufacturing, the level of job quits declined 29.6% y/y and dropped 34.8% y/y in finance. The number of quits in professional & business services declined 37.6% y/y and fell 55.1% y/y in leisure & hospitality.

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