U.S. JOLTS: Job Openings Strengthen While Hiring Falters

The Bureau of Labor Statistics reported that the total job openings rate increased to 4.0% during April and returned to its record high. Despite the increase, the hiring rate fell to 3.5%, its lowest level in 12 months. These figures are from the Job Openings & Labor Turnover Survey (JOLTS).

Improvement in the job openings rate was broad-based. The private-sector job openings rate rose to 4.2% and nearly matched the record. The job openings rate in professional & business services eased to 5.2% and remained below the 2016 high of 6.1%. The leisure & hospitality openings rate jumped to 5.1%, just below the record high. The education & health services rate held steady at 4.6%, but was below the near-record high of 5.1% in February. The trade, transportation & utilities rate improved to 3.4%. In construction, the openings rate jumped to 2.9%, a seven-month high. The factory sector job openings rate declined to 2.8% from its record high of 3.2%. The government sector rate ticked higher to 2.5% and matched the highest rate since 2010. 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 increased 4.5% to a record high of 6.044 million. Private-sector job openings increased 4.2% (6.7% y/y) led by a 26.1% surge (10.3% y/y) in the construction sector. Leisure & hospitality openings gained 15.2% (10.6% y/y) and education & health services openings notched 0.8% higher (3.9% y/y). Showing decline were factory sector openings, off 11.1% (-1.4% y/y). Professional & business services opening declined 1.6% (+15.0% y/y) and retail trade openings fell 2.7% (-2.4% y/y). Job openings in the public sector increased 7.2% (10.7% y/y).

The decline in the overall hires rate reflected a fall in the private sector to 3.8%, the lowest level in roughly three years. The construction sector rate picked up to 5.5%, but the trade, transportation & utilities rate fell sharply to 3.5%, a four-year low. The hiring rate in professional & business services declined to 5.0%, down from the 6.0% high nine months earlier. The hiring rate in leisure & hospitality declined to 5.9% from the December 2015 high of 7.0%, and the hires rate in the education & health services sector fell to 2.6% from 3.0%. The government sector hiring rate held steady at 1.5%, down from 1.7% nine months earlier.

The number of private-sector hires declined 5.2% (+0.7% y/y) to 4.718 million. Hiring in education & health services fell 10.5% (+2.4% y/y) and reversed the prior month's increase. Hiring in trade, transportation & utilities fell 7.5% (-2.7% y/y) to the lowest level since January 2014. Factory sector hiring declined 5.2% (+18.9% y/y), and the number of leisure & hospitality jobs fell 3.0% (+0.8% y/y). Professional & business service sector hiring fell 2.5% (-5.6% y/y). Construction sector hiring improved 1.6% (12.8% y/y) and government sector employment rose 1.2% (-5.9% y/y).

The total job separations rate edged lower to 3.4% and neared the 2015 low. The leisure & hospitality separations rate declined to 5.8% and compared to the 2016 peak of 6.4%. The construction sector's separations rate held at 5.4% and the professional and business services rate also was steady at a lessened 5.0%. In trade, transportation & utilities the separations rate fell to 3.5%, a four-year low. The information sector's rate fell sharply to 2.4%. The factory sector separations rate eased to 2.5% and the separations rate fell to 1.9% in the financial sector. The separations rate in the government sector rose slightly to 1.5%. Separations include quits, layoffs, discharges, and other separations as well as retirements.

The layoff and discharge rate held steady near the record low at 1.1%, down from 1.3% two years ago. The private-sector rate eased to 1.2% versus the 2015 high of 1.5%. The government sector rate ticked up to 0.5%. Total layoffs declined 4.7% y/y. Private-sector layoffs were off 4.4% y/y, while government layoffs fell 9.0% y/y.

Large numbers of hires and separations occur every month throughout the business cycle. Net employment change results from the relationship between hires and separations. When the number of hires exceeds the number of separations, employment rises, even if the hires level is steady or declining. Conversely, when the number of hires is less than the number of separations, employment declines, even if the hires level is steady or rising. These totals include workers who may have been hired and separated more than once during the year.

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