U.S. JOLTS: U.S. Labor Market Activity Remains Firm

The total job openings rate of 3.7% during January held steady with the prior three months. Nevertheless, the rate was below July's peak of 4.0%. The private-sector job openings rate remained at 4.0%, where it was during all of last year. In the government sector, the job openings rate fell to 2.0%, the lowest level since June 2015. 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 January. The job openings rate in education & health services eased to 4.7% and has been stable since the middle of last year. In professional & business services, the openings rate improved m/m to 5.2%, but was down from the 6.1% high in March 2016. The job openings rate in leisure & health services declined m/m to 4.3%, still lower than the March 2016 high of 5.0%. The rate in retail trade declined to 3.7% from 3.9% during all of last year. The factory sector job openings rate of 2.9% was improved from last year's 2.7% average. In construction, the rate of 2.1%, compared to 3.4% in September. 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 rebounded 1.6% (-1.5% y/y) to 5.626 million, down from the July high of 5.973 million. Private-sector openings improved 2.1% to 5.173 million and eased 0.8% y/y. Construction job openings increased 5.0% (-7.0% y/y) following sharp declines during the prior six months, while the number of openings in education & health services declined 2.9% y/y. Factory sector job openings jumped 6.4% (4.6% y/y). Professional & business services openings rebounded 13.8% m/m following sharp declines since July, while leisure & hospitality openings were off 3.5% y/y. Government-sector job openings declined 9.4% y/y.

The total hires rate improved m/m to 3.7%, but that remained down from the February 2016 high of 3.8%. The private-sector hiring rate remained at 4.1%, still below the high of 4.2% reached last February. The hiring rate in leisure & hospitality rose to 6.6%, still below the December 2015 peak of 7.0%. In professional & business services, the rate held steady at 5.6%. In education and health services, the hires rate improved to 2.9% and has moved erratically sideways for two years. The hires rate in construction fell to 5.6%. A 4.3% hires rate in retail trade was below last February's high of 5.3%. The government-sector hiring rate improved slightly to 1.5%, but remained nearly the lowest level in roughly two years. The hires rate is the number of hires during the month divided by employment.

The number of hires strengthened 2.5% (6.3% y/y) to 5.440 million. Private-sector hiring improved 2.4% (7.2% y/y), while jobs in leisure & hospitality jumped 10.8% y/y. Construction employment eased 5.5% m/m, but surged 29.5% y/y. Factory sector hiring improved 5.4% y/y. The number of professional & business services jobs gained 0.4% (1.9% y/y), while jobs in retail trade increased 1.6% (-8.6% y/y). Government sector hiring improved 5.3% m/m, but declined 6.1% y/y.

The total job separations rate ticked up to 3.6% from last year's low of 3.4%. The actual number of separations surged 3.4% m/m (4.5% y/y) to 5.258 million. Retail trade separations fell 7.3% y/y. Leisure & hospitality separations increase 9.9% y/y. Professional and business services declined 1.8% y/y, but separations in the education and health services sector jumped 9.4% y/y. Government separations fell 1.8% y/y. 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% in February 2016. The private-sector rate held at 1.2% versus 1.1% in September. The government sector rate held a two-year low of 0.4%. Total layoffs declined 5.7% y/y. Private-sector layoffs were off 5.1% y/y, while government layoffs dropped 13.8% 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.