U.S. JOLTS: Job Openings Rate Dips; Hiring Rate Improves

The Bureau of Labor Statistics reported that the total job openings rate slipped to 4.5% during July from an unrevised 4.6% in June. It remained below the 4.8% record reached in January. The job openings rate is the job openings level as a percent of total employment plus the job openings level. The ability to find workers to fill openings improved as the hiring rate rose to 3.9%. It remained lower than the April peak of 4.0% and has been below the openings rate since mid-2014. Employers are still reluctant to let people go. The layoff & discharge rate ticked up m/m to 1.2%, but remained near the record low. Individuals remain ready to find new work. The quits rate rose to a near-record 2.4%.

The private-sector job openings rate also held steady m/m at 4.8%. It remained below the 5.2% record reached in November. The rate has increased from 4.6% early last year and from the 2009 average of 2.0% at the recession low. In professional & business services, the rate fell m/m to 5.5% and was below January's 6.5%. In leisure & hospitality, the rate of 5.3% was lower than December's high of 6.2%. In education & health services, the rate eased to 5.1%, still up from 2.6% in 2010. In trade, transportation & utilities, the rate eased to 4.6%. The openings rate rose slightly to 4.7% in the construction sector, still down from the record 5.5% in April. In manufacturing, the rate held at the record of 3.9%, higher than the 3.7% rate twelve months earlier. The government sector job openings rate fell to 2.9%, but remained up sharply from the 2009 low of 1.2%.

Job availability fell m/m. The level of job openings eased 0.4% (-3.0% y/y) to 7.217 million after a 1.8% June decline. It was the lowest level since February and 5.4% below the record high reached in November of last year. Private-sector openings fell 3.1% y/y while government sector job openings declined 2.4%, though they have trended higher recently.

Hiring activity improved. The private-sector hiring rate rose to 4.3% and nearly equaled April's expansion high of 4.4%. The rate in leisure & hospitality improved to 6.8%, a three-month high. In professional & business services, the hiring rate recovered to 5.6% after falling sharply during the prior two months. It nevertheless remained below the June 2017 high of 6.1%. The construction sector's hiring rate slipped m/m to 5.1%, and remained well below the high of 6.6% in December 2016. The hiring rate in trade, transportation & utilities increased to 4.3%, up sharply from the March low of 3.9%. In education & health services, the rate surged to 3.1%. That equaled the highest level since 2006, up from the 2011 low of 2.2%. In manufacturing, the hiring rate rose to 2.7%. The hiring rate in government edged up to 1.6%.

Total hiring increased 4.1% (2.1% y/y) to 5.93 million. Hiring in the private sector rose 2.8% y/y while government sector hiring declined 8.7% y/y.

Individuals were more inclined to find new work. The overall job separations rate rose to 3.8% and matched the expansion high. The private sector separations rate increased to the cycle high of 4.2%, up from the recession low of 3.4%. The separations rate in government held steady at 1.5%.

The total level of separations rose 1.5% y/y. In the private sector, the 2.6% y/y increase reflected an 2.5% y/y gain in professional & business services. In educational and health services, separations climbed 4.8% y/y, while separations in trade, transportation & utilities gained 4.7% y/y. Separations in leisure & hospitality rose 0.9% y/y. The construction sector realized a 3.8% y/y rise in separations. Working the other way, separations in manufacturing declined 10.7% y/y while separations in the government sector fell 13.7% y/y.

Confidence in finding work remains high. The level of quits rose 4.3% y/y to 3.592 million in July. The near-record quits rate of 2.4% was increased sharply from 1.3% at the beginning of the expansion. The private-sector quits rate rose slightly to 2.6%, up from 1.4% in the fall of 2009. The government sector quits rate remained low at 0.8%.

The level of layoffs declined 3.2% y/y. In the private sector, layoffs were little changed y/y. The layoff rate remained near the record at 1.3% and was down from the 2009 high of 2.2%. Layoffs declined by roughly one-third y/y in the government sector and the layoff rate was steady at 0.4%.

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