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Economy in Brief

U.S. JOLTS: Job Openings & Hiring Rates Ease
by Tom Moeller  October 9, 2019

The Bureau of Labor Statistics reported that the total job openings rate slipped to 4.4% during August from an unrevised 4.5% in July. It remained below the 4.8% record reached in January. The job openings rate is the job openings level as a percent of total employment plus the job openings level. The ability to find workers to fill openings also fell as the hiring rate eased to 3.8%. It has been moving sideways since early last year and remained lower than the April peak of 4.0%. The hiring rate has been below the openings rate since mid-2014. Employers are still reluctant to let people go. The layoff & discharge rate held steady m/m at 1.2%, remaining near the record low. Individuals remain ready to find new work. The quits rate eased m/m to 2.3%, but remained near the record high of 2.4%.

The private-sector job openings rate declined m/m to 4.7%. The rate has increased from 4.5% since early last year. In professional & business services, the rate held m/m at 5.4% and was below January's 6.5%. In leisure & hospitality, the rate of 5.1% was lower than December's high of 6.2%. In education & health services, the rate held at 5.0%, up from 2.6% in 2010. In trade, transportation & utilities, the rate ticked up to 4.5%. The openings rate rose to 4.8% in the construction sector but remained below the record 5.5% reached in April. In manufacturing, the rate declined to 3.6%. The government sector job openings rate was stable m/m at 3.6%, but remained well above the 2009 low of 1.2%.

Job availability fell m/m. The level of job openings declined 1.7% (-4.0% y/y) and has been declining steadily since January's high. It was at the lowest level since March of last year. Private-sector openings fell 4.4% y/y while government sector job openings held fairly steady y/y.

Hiring activity also weakened. The private-sector hiring rate declined to 4.2%, down from July's expansion high of 4.4%. The rate in leisure & hospitality eased m/m to 6.8%. In professional & business services, the hiring rate declined sharply to 5.1%, the lowest level since early-2017. It remained below the June 2017 high of 6.1%. The construction sector's hiring rate improved m/m to 5.6%, but remained below the high of 6.6% in December 2016. The hiring rate in trade, transportation & utilities fell to 4.2%. In education & health services, the rate declined to 2.8% after surging to 3.1% in July. In manufacturing, the hiring rate held steady at 2.6%, well below the July 2018 high of 3.1%. The hiring rate in government edged up to 1.7%.

Total hiring fell 3.3% (-0.8% y/y) and reversed July's increase. Hiring in the private sector eased 0.6% y/y while government sector hiring declined 3.3% y/y.

Individuals remained ready to find new work. The overall job separations rate eased to 3.7%, just below the expansion high. The private sector separations rate eased slightly from the cycle high to 4.1%. The separations rate in government held steady at 1.5%.

The total level of separations rose 0.7% y/y, the same as in the private sector. The increase reflected a 1.1% y/y gain in professional & business services separations. In educational and health services, separations climbed 1.4% y/y, but separations in trade, transportation & utilities eased 1.7% y/y. Separations in leisure & hospitality rose 3.6% y/y. The construction sector saw an 18.6% y/y rise in separations. Separations in manufacturing declined 8.6% y/y while separations in the government sector rose 0.6% y/y, reflecting a strong m/m increase in August.

Confidence in finding work remains high. The level of quits rose 1.5% y/y to 3.526 million in August. The quits rate eased m/m to 2.3%, but was sharply higher versus 1.3% at the beginning of the expansion. The private-sector quits rate eased to 2.6%, but has increased from 1.4% since the fall of 2009. The government sector quits rate of 0.8% was double that at the beginning of the economic expansion.

The level of layoffs declined 1.2% y/y. In the private sector, layoffs eased 0.4% y/y and the layoff rate remained near the record low at 1.2%, down from the 2009 high of 2.2%. Layoffs declined 13.0% y/y in the government sector and the layoff rate was steady at 0.4%.

The Job Openings & Labor Turnover Survey (JOLTS) dates to December 2000 and the figures are available in Haver's USECON database.

The minutes to the latest FOMC meeting can be found here.

JOLTS (Job Openings & Labor Turnover Survey, SA) Aug July June Aug'18 July'17 July'16
Job Openings, Total
 Rate (%) 4.4 4.5 4.6 4.7 4.1 4.0
 Total (000s) 7,051 7,174 7,248 7,342 6,349 6,088
Hires, Total
 Rate (%)  3.8 3.9 3.8 3.9 3.8 3.8
 Total (000s) 5,779 5,978 5,716 5,826 5,510 5,427
Layoffs & Discharges, Total
 Rate (%) 1.2 1.2 1.1 1.2 1.3 1.2
 Total (000s) 1,787 1,788 1,711 1,809 1,886 1,777
Quits, Total
 Rate (%) 2.3 2.4 2.3 2.3 2.1 2.1
 Total (000s) 3,526 3,668 3,462 3,473 3,134 2,988
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