U.S. JOLTS: Job Openings Rate Improves Sharply but Hires Rate Deteriorates

Labor market conditions tightened this summer. The job openings rate during August improved m/m to 3.4%, the highest level since April 2001. July's rate was revised down to 3.2% from 3.3%. The job openings rate is the number of job openings on the last business day of the month as a percent of total employment plus job openings. The actual number of job openings surged 23.2% y/y to 4.835 million. The Bureau of Labor Statistics reports these figures in its Job Openings & Labor Turnover Survey (JOLTS).

The private-sector job openings rate improved to 3.6% from a downwardly revised 3.4%. It was the highest level since April 2001 and up from the recession low of 1.7%. The rate in the health care & social assistance sector jumped to 4.3% from 2.0% in January of last year. The leisure & hospitality rate recovered to 4.6% while the professional & business services rate held steady at 4.4%. Also recovered was the 3.1% rate in trade, transportation & utilities industries. The 2.4% rate in the factory sector has been stable for four months. The construction rate fell to 1.9%, the lowest level since April. The job openings rate in the government sector slipped to 2.0% but remained up from 1.3% to 1.7% averaged back to 2008.

Moving in the other direction was the hires rate. It dropped sharply to 3.3% from 3.6% and was at the lowest level since January. The hires rate is the number of hires during the month divided by employment. The private sector hires rate dropped to 3.7%, the lowest since January. Declines spread across industries. The rate in the retail sector fell to 4.4% from 4.9%. The construction hires rate fell sharply to 4.9% and reversed most of its July rise. The factory sector rate dropped to 1.9%, the lowest level in six months. Amongst leisure & hospitality firms, the hires rate slipped to a still-high 5.7%. In professional & business services, it also edged lower to 5.2%. In education & health services, the hires rate notched down to 2.4%. The government sector hires rate held at 1.3% for the fifth straight month.

The number of hires plummeted 6.0% m/m but remained up 1.0% y/y. Private sector hires gained 1.1% y/y as leisure & hospitality jobs jumped 9.7% y/y and professional & business services hiring gained 1.9% y/y. On the soft side, new retail trade jobs slipped 0.4% y/y and construction sector employment was unchanged y/y. Factory sector hiring fell 7.9% y/y while government sector hiring ticked 0.7% higher.

The job separations rate slipped to 3.2% but the actual number of separations increased 0.5% y/y. Separations include quits, layoffs, discharges, and other separations as well as retirements. The private sector separations rate fell to 3.5%, while the government sector's rate inched up to 1.3%. The layoff & discharge rate fell to a record low of 1.1%. The private sector layoff rate inched down m/m to 1.3% but the government's rate was steady at 0.3%.

The JOLTS survey dates to December 2000 and the figures are available in Haver's USECON database.