U.S. JOLTS: U.S. Labor Market Activity Improves Slightly

The total job openings rate of 3.7% during November was improved from October's 3.6%, revised from 3.7%. It remained down from the record high of 3.9% in July. The private-sector job openings rate held steady, however, at 3.9%. It was slightly higher versus last year's 3.6% average. In the government sector, the job openings rate improved to 2.4%, the highest level since July. The Bureau of Labor Statistics reports these figures in its Job Openings & Labor Turnover Survey (JOLTS).

Movement in the job openings rate by sector was mixed in November. The job openings rate in education & health services eased to 4.7% and was unchanged y/y. In professional & business services, the openings rate of 4.6% was steady m/m, but down from last year's high of 5.5%. The job openings rate in leisure & health services increased m/m to 4.4%, still lower than the 2016 high of 4.9%. Steady was the rate in retail trade at 3.9%, but that was down from the record 4.0% in September. The factory sector job openings rate of 4.6% remained nearly the same for four months. In construction, the rate eased to 2.7%, the lowest level since June. 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 1.3% (6.2% y/y) to 5.522 million, down from the April high of 5.845 million. Private-sector openings improved 0.4% (5.2% y/y) to 4.972 million, but that was down 6.4% from the April high. Construction job openings fell 4.7% m/m and by 14.4% from the March high, while the number in education & health services fell 3.4% (+0.6% y/y). Factory sector openings rose by one-third y/y. Professional & business services openings declined 12.6% y/y, while leisure & hospitality openings fell 1.0% y/y. Government-sector job openings jumped 16.1% y/y.

The total hires rate held m/m at 3.6%, but that remained down from February's high of 3.8%. The private-sector hiring rate was stable m/m at 3.9% and remained below the high of 4.2% reached in February. The hiring rate in leisure & hospitality increased to 6.7%, a nine-month high. In professional & business services, the rate improved to 5.2%, but remained near its lowest level since June. In education and health services, the hires rate held at 2.8%, and has moved erratically sideways for two years. The hires rate in construction improved to 5.0%, down sharply from 6.2% in December 2014. A 4.2 % hires rate in retail trade was below the February high of 5.4%. The government-sector hiring rate increased to 1.7% and was up from 1.0% early in 2011. The hires rate is the number of hires during the month divided by employment.

The number of hires increased 1.1% (-0.6% y/y) to 5.219 million. Private-sector hiring improved 0.9% (-1.1% y/y) as jobs in leisure & hospitality jumped 7.1% (4.9% y/y). Construction employment gained 1.2% (-1.5% y/y), but factory sector hiring improved 0.4% (-1.1% y/y). The number of professional & business services jobs rebounded 1.6% (0.4% y/y), but jobs in retail trade experienced a 9.6% decrease (-12.8% y/y). Government- sector hiring recovered 4.2% (6.3% y/y) following a sharp October fall.

The total job separations rate was at 3.5%, down versus its cycle high of 3.6% in February. The actual number of separations rose 1.2% m/m (1.4% y/y) to 5.028 million. Retail trade separations declined 5.2% y/y, but has moved sideways for two years. Leisure & hospitality separations increased 6.1% y/y. Professional and business services remained unchanged y/y, but separations in the education and health services sector fell 1.3% y/y. Government separations increased 1.2% y/y but have moved sideways for a year. Separations include quits, layoffs, discharges, and other separations as well as retirements.

The layoff and discharge rate remained near the record low at 1.1%, down from 1.3% in February. The private-sector rate held near the record low at 1.2%. The government sector rate remained at 0.5%, about where it's been for two years. Total layoffs declined 4.7% y/y. Private-sector layoffs fell 5.2% y/y, while government layoffs rose 1.7% 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. Over the 12 months ending in July, hires totaled 62.5 million and separations totaled 60.0 million, yielding a net employment gain of 2.5 million. 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.

Is the Next Recession Around the Corner? Probably Not from the Federal Reserve Bank of Dallas is available here.