U.S. JOLTS: Openings and Hiring Increase in January

Total job openings increased 6.0% m/m (-6.5% y/y) to 6.946 million in January from 6.550 million in December (previously 6.542 million), according to the Job Openings and Labor Turnover Survey. General market expectations were for a slightly smaller increase. The job openings rate (the ratio of openings to nonfarm employment plus openings) rose to 4.2% from 4.0% in December. In January the number of unemployed fell while openings rose, meaning that the excess of unemployment over openings declined. Nonetheless, the number of unemployed continued to exceed the number of openings for the sixth consecutive month. Prior to that, openings had exceeded the number of unemployed since May 2021.

Private sector openings increased 6.3% m/m (+370k) to 6.198 million, also their highest level in three months. Accordingly, the private sector openings rate rose to 4.4% from 4.1% in December. Gains were widespread across major industries, led by 169k increase in finance openings, 150k increase in healthcare openings, 130k increase in retail trade openings, and 69k rise in manufacturing openings. In contrast, professional and business services openings fell 190k and construction openings slipped 14k. Total government openings increased 26k, almost all accounted for a 25k increase in state and local government openings.

Total hiring edged up 0.4% m/m (+1.1% y/y) to 5.294 million in January, the highest level since last June, from 5.272 million in December. The hiring rate was unchanged at 3.3%. Private sector hiring inched up 0.3% m/m (+15k) to 4.976 million in January, again the highest level since last June. The private sector hiring rate was also unchanged at 3.7%. Meaningful monthly gains were posted by construction (23k), manufacturing (13k), professional and business services (35k), and leisure and hospitality (23k). In contrast, hiring fell 35k in trade and transportation and declined 43k in financial services. Government hiring increased 7k with gains fairly equally distributed between federal and state/local.

Total separations declined 1.9% m/m (-2.6% y/y) to 5.105 million in January from 5.203 million in December. The separation rate slipped to 3.2% from 3.3% in December. Private separations fell 1.9% m/m (-91k) to 4.773 million in January with the private separation rate declining to 3.5% from 3.6%. By industry, the January decline was more than accounted for by a 119k decline in separations in trade and transportation.

Within private sector separations, private sector quits fell 90k, layoffs declined 40k while other separations increased 39k. Quits are generally voluntary separations initiated by the employee. Therefore, the quits rate can serve as a measure of workers’ willingness or ability to leave jobs. Amid the volatility, quits stabilized somewhat last year after having trended down since early 2022. However, they remain at historically low levels, indicating that the labor market has lost some of its previous dynamism. In contrast, layoffs and discharges are involuntary separations initiated by the employer. After trending up over the past couple of years, layoffs have generally fallen over the past few months. Low levels of quits indicate that there is more difficulty finding a new job, while falling layoffs indicate that firms are less willing to lay off existing workers.

The Job Openings and Labor Turnover Survey (JOLTS) data are available in Haver’s USECON database.